SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 20-F

(Mark One)

£	REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934
OR
R	ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the fiscal year ended 31 March 2026
OR
£	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
OR
£	SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	Date of event requiring this shell company report
	For the transition period from      to

Commission file number: 001-14958

NATIONAL GRID PLC

(Exact name of Registrant as specified in its charter)

England and Wales

(Jurisdiction of incorporation or organization)

1-3 Strand, London WC2N 5EH, England

(Address of principal executive offices)

Justine Campbell

011 44 20 7004 3000

Facsimile No. 011 44 20 7004 3004

Group General Counsel and Company Secretary

National Grid plc

1-3 Strand London WC2N 5EH, England

(Name, Telephone, E-mail and/or Facsimile number and Address of Company Contact Person)

Securities registered or to be registered pursuant to Section 12(b) of the Securities Exchange Act of 1934:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Ordinary Shares of 12 204/473 pence each	NG	The New York Stock Exchange*
American Depositary Shares, each representing five	NGG	The New York Stock Exchange
5.602% Notes due 2028	NGG28	The New York Stock Exchange
5.809% Notes due 2033	NGG33	The New York Stock Exchange
5.418% Notes due 2034	NGG34	The New York Stock Exchange

____________

*    Not for trading, but only in connection with the registration of American Depositary Shares representing Ordinary Shares pursuant to the requirements of the Securities and Exchange Commission.

Securities registered or to be registered pursuant to Section 12(g) of the Securities Exchange Act of 1934: None.

Securities for which there is a reporting obligation pursuant to Section15(d) of the Securities Exchange Act of 1934: None.

The number of outstanding shares of each of the issuer’s classes of capital or common stock as of 31 March 2026 was 5,198,968,690

Ordinary Shares of 12 204/473 pence each    

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act: Yes R No £

If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934. Yes £ No R

Note — Checking the box above will not relieve any registrant required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 from their obligations under those Sections.

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days: Yes R No £

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).: Yes R No £

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or an emerging growth company. See definition of “large accelerated filer” “accelerated filer” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer R Non-accelerated filer £  Accelerated filer £ Emerging growth company £

If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards† provided pursuant to Section 13(a) of the Exchange Act.  ☐

†The term “new or revised financial accounting standard” refers to any update issued by the Financial Accounting Standards Board to its Accounting Standards Codification after April 5, 2012.

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. R

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐

Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:

U.S. GAAP £

International Financial Reporting Standards as issued by the International Financial Reporting Standards R

Other £

If “Other” has been checked in response to the previous question, indicate by check mark which financial statement item the registrant has elected to follow. Item 17 £ Item 18 £

If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes £ No R

This constitutes the annual report on Form 20-F of National Grid plc (the “Company”) in accordance with the requirements of the US Securities and Exchange Commission (the “SEC”) for the year ended 31 March 2026 and is dated 3 June 2026. Details of events occurring subsequent to the approval of the annual report on 13 May 2026 are summarised in section “Further Information” which forms a part of this Form 20-F. The content of the Group’s website (www.nationalgrid.com/uk) should not be considered to form part of this annual report on Form 20-F.

Form 20-F Cross Reference Table

Item	Form 20-F caption	Location in the document	Pages(s)
1	Identity of directors, senior management and advisors	Not applicable	—
2	Offer statistics and expected timetable	Not applicable	—
3	Key Information
	3A [Reserved]		—
	3B Capitalization and indebtedness	Not applicable
	3C Reasons for the offer and use of proceeds	Not applicable	—
	3D Risk Factors	“Additional Information—Internal control and risk factors—Risk factors”	226-232
4	Information on the company
	4A History and development of the company	“Strategic Report—National Grid at a glance”	4-5
		“Strategic Report—Chief Executive’s review”	8-11
		“Strategic Report—Our business environment”	14-15
		“Strategic Report—Performance against our strategic priorities ”	16-17
		“Strategic Report—Our key performance indicators”	26-29
		“Strategic Report—Financial review—Capital Investment and asset growth ”	78
		“Financial Statements—Notes to the consolidated financial statements—Note 2. Segmental analysis—(c) Capital investment”	148
		“Financial Statements—Notes to the consolidated financial statements—Note 3. Revenue —(g) UK Electricity System Operator”	150
		“Financial Statements—Notes to the consolidated financial statements—Note 5 Exceptional items and remeasurements —2026;—2025;—2024”	155-156
		“Financial Statements—Notes to the consolidated financial statements—Note 10. Assets held for sale and discontinued operations”	164-165
		“Additional Information—The business in detail—UK Regulation” and “—US Regulation”	220-225
		“Additional Information—Shareholder information—Articles of Association”	251-252
		“Additional Information—Shareholder Information— Documents on display”	252
		“Additional Information—Other disclosures—Research, development and innovation activity”	235
		“Additional Information—Other unaudited financial information—Alternative performance measures/non-IFRS reconciliations—Capital investment at constant currency”	241
		“Additional Information—Shareholder information”	250-255
	4B Business overview	“Strategic Report—National Grid at a glance —Our businesses”	4
		“Strategic Report—Our Business Model”	12-13
		“Strategic Report—Our Business environment”	14-15
		“Strategic Report—Performance against our strategic priorities ”	16-17
		“Strategic Report—Our business units “—UK Electricity Transmission”; “—UK Electricity Distribution”; —New England”; —New York”; “—National Grid Ventures”	18-22
		“Strategic Report—Task Force on Climate-related Financial Disclosures (TCFD)”	53-68
		“Strategic Report—Financial review—Segmental operating profit”	73-77

i

		“Financial Statements—Notes to the consolidated financial statements—Note 2. Segmental analysis”	145-148
		“Financial Statements—Notes to the consolidated financial statements—Note 3. Revenue”	149-152
		“Financial Statements—Notes to the consolidated financial statements—Note 10. Assets held for sale and discontinued operations”	164-165
		“Financial Statements—Notes to the consolidated financial statements—Note 17. Derivative financial instruments—(b) Commodity contract derivatives”	175
		“Additional Information—The business in detail—UK Regulation” and “—US Regulation”	220-225
	4C Organizational structure	“Financial Statements—Notes to the consolidated financial statements—Note 34. Subsidiary undertakings, joint arrangements and associates”	206-209
	4D Property, plants and equipment	“National Grid at a glance—Our businesses”	4
		“Strategic Report—Our business model”	12-13
		“Strategic Report—Task Force on Climate-related Financial Disclosures (TCFD)”	53-68
		“Strategic Report—Financial review—Capital Investment and asset growth”	78
		“Strategic Report—Financial review—Financial Position”	80
		“Financial Statements—Consolidated statement of financial position”	140
		“Financial Statements—Notes to the consolidated financial statements—Note 13. Property, plant and equipment”	169-171
		“Financial Statements—Notes to the consolidated financial statements—Note 21. Borrowings”	177-178
		“Additional Information—Internal control and risk factors—Risk factors—Operational risks”	229-231
		“Additional Information—Other disclosures—Property, plant, equipment and borrowings”	235
4A	Unresolved staff comments	“Additional Information—Other disclosures—Unresolved SEC staff comments”	235
5	Operating and financial review and prospects
	5A Operating results	“Strategic Report—Our business environment”	14-15
		“Strategic Report—Our business units “—UK Electricity Transmission”; “—UK Electricity Distribution”; —New England”; —New York”; “—National Grid Ventures”	18-22
		“Strategic Report—Task Force on Climate-related Financial Disclosures (TCFD)”	53-68
		“Strategic Report—Financial review”	69-84
		“Financial Statements—Notes to the consolidated financial statements—Note 2. Segmental analysis”	145-48
		“Financial Statements—Notes to the consolidated financial statements—Note 3. Revenue”	149-152
		“Financial Statements—Notes to the consolidated financial statements—Note 5 Exceptional items and remeasurements ”	154-157
		“Financial Statements—Notes to the consolidated financial statements—Note 32. Financial risk management—(c) Currency risk”	197-198
		“Additional Information—The business in detail—Other activities”;—UK Regulation” and “—US Regulation”	220-225
		“Additional Information—Internal control and risk factors—Risk factors—Law, regulation and political and economic uncertainty”	227
		“Additional Information—Commentary on consolidated financial statements”	248-249
	5B Liquidity and capital resources	“Strategic Report—Task Force on Climate-related Financial Disclosures (TCFD)”	53-68
		“Strategic Report—Financial review”	69-84

ii

		“Financial Statements—Consolidated cash flow statement”	141
		“Financial Statements—Notes to the consolidated financial statements—Note 1.A Going concern”	142
		“Financial Statements—Notes to the consolidated financial statements—Note 17. Derivative financial instruments”	174-175
		“Financial Statements—Notes to the consolidated financial statements—Note 20. Cash and cash equivalents”	177
		“Financial Statements—Notes to the consolidated financial statements—Note 21. Borrowings”	177-178
		“Financial Statements—Notes to the consolidated financial statements—Note 29. Net debt”	190-193
		“Financial Statements—Notes to the consolidated financial statements—Note 30. Commitments and contingencies”	194
		“Financial Statements—Notes to the consolidated financial statements—Note 32. Financial risk management”	195-205
		“Financial Statements—Notes to the consolidated financial statements—Note 33. Borrowing facilities”	205
		“Additional Information—The business in detail—UK Regulation”; “—US Regulation”	220-225
		“Additional Information—Internal control and risk factors—Risk factors—Financing and liquidity”	232
	5C Research and development, patents and licenses, etc.	“Additional Information—Other disclosures—Research, development and innovation activity”	235
	5D Trend information	“Strategic Report—Chief Executive's Review ”	8-11
		“Strategic Report—Our business environment”	14-15
		“Strategic Report—Task Force on Climate-related Financial Disclosures (TCFD)”	53-68
		“Strategic Report—Financial review”	69-84
		“Strategic Report—Our business units “—UK Electricity Transmission”; “—UK Electricity Distribution”; —New England”; —New York”; “—National Grid Ventures”	18-22
	5E Critical Accounting Estimates	Not applicable	—
6	Directors, senior management and employees
	6A Directors and senior management	“Corporate Governance Report—Our Board”	91-93
	6B Compensation	“Corporate Governance Report—People &’ Remuneration Committee report”	107-126
		“Corporate Governance Report— People & remuneration Committee report —Remuneration at a Glance”	109-110
		“Corporate Governance Report—People & Remuneration Committee report—Statement of implementation of policy in 2025/26 ”	111-124
		“Financial Statements—Notes to the consolidated financial statements—Note 4. Other operating costs—(c) Key management compensation”	153
		“Financial Statements—Notes to the consolidated financial statements—Note 25. Pensions and other post-retirement benefits”	179-186
	6C Board practices	“Corporate Governance Report—Our Board”	91-93
		“Corporate Governance Report—Corporate Governance overview”	89-90
		“Corporate Governance Report—Audit & Risk Committee report”	100-104
		“Corporate Governance Report—People & Remuneration Committee report”	107-126
		“Corporate Governance Report—People & Remuneration Committee report—Statement of implementation of policy in 2025/26 ”	111-124
		“Additional Information—Shareholder Information—Articles of Association—Directors”	251
	6D Employees	“Strategic Report—Our business model”	12-13

iii

		“Strategic Report—Our People”	47-48, 234
		“Financial Statements—Notes to the consolidated financial statements—Note 4. Other operating costs—(b) Number of employees”	153
		“Additional Information—Other disclosures —Unions”	234
	6E Share ownership	“Corporate Governance Report—People & Remuneration Committee report—Statement of implementation of policy in 2025/26 ”	111-124
		“Additional Information—Shareholder information—All-employee share plans”	255
		“Share ownership”	“Further Information”
	6F Disclosure of a registrant’s action to cover erroneously awarded compensation	Not applicable	—
7	Major shareholders and related party transactions
	7A Major shareholders	“Additional Information—Shareholder information—Material interests in shares”	253
		“Material interests in shares”; and “Material interest in American Depositary Shares”	“Further Information”
	7B Related party transactions	“Financial Statements—Notes to the consolidated financial statements—Note 30. Commitments and contingencies”	194
		“Financial Statements—Notes to the consolidated financial statements—Note 31. Related party transactions”	194
		“Material interests in shares”	“Further Information”
	7C Interests of experts and counsel	Not applicable	—
8	Financial information
	8A Consolidated statements and other financial information	“Strategic Report—Chair’s statement”	6-7
		“Strategic Report—Financial review”	69-84
		“Strategic Report—Corporate governance overview—Key Board Activities ”	94
		“Corporate Governance—Audit & Risk Committee report—Significant issues and judgments relating to the financial statements	102
		Financial Statements—Consolidated financial statements ”	137-211
		“Financial Statements—Notes to the consolidated financial statements—Note 9. Dividends”	164
		“Reports of Independent Registered Public Accounting Firm—Audit opinions for Form 20-F”	“Further Information”
	8B Significant changes	“Strategic Report—Financial Review—Post balance sheet events”	84
		“Financial Statements—Notes to the consolidated financial statements—Note 36. Post balance sheet events”	211
		“Additional Information—Shareholder Information—Events after the reporting period”	252
		“Subsequent Events”	“Further Information”
9	The offer and listing
	9A Offer and listing details	“Additional Information—Shareholder Information—Share information”	252
	9B Plan of distribution	Not applicable	—
	9C Markets	“Additional Information—Shareholder information—Share Information”	252
	9D Selling shareholders	Not applicable	—
	9E Dilution	Not applicable	—
	9F Expenses of the issue	Not applicable	—
10	Additional information

iv

	10A Share capital	Not applicable	—
	10B Memorandum and articles of association	“Additional Information—Shareholder information—Articles of Association”	251-252
		“Additional Information—Shareholder information—Articles of Association; — Dividend Rights"	251
		“Additional Information—Other disclosures—Change of control provisions”	233
		“Additional Information—Other disclosures—Corporate governance practices: differences from NYSE listing standards”	233-234
	10C Material contracts	“Additional Information—Other disclosures—Material contracts”	235
	10D Exchange controls	“Additional Information—Shareholder information—Exchange controls”	252
	10E Taxation	“Additional Information——Shareholder information—Taxation”	253-255
	10F Dividends and paying agents	Not applicable	—
	10G Statement by experts	Not applicable	—
	10H Documents on display	“Additional Information—Shareholder information—Documents on display”	252
	10I Subsidiary information	Not applicable
	10J Annual Report to Security holders	Not applicable
11	Quantitative and qualitative disclosures about market risk
	11(a) Quantitative information about market risk	“Financial Statements—Notes to the consolidated financial statements—Note 17. Derivative financial instruments”	174-175
		“Financial Statements—Notes to the consolidated financial statements—Note 32. Financial risk management”	195-205
		“Additional Information—Internal Control and Risk factors—Risk Factors”	226-232
	11(b) Qualitative information about market risk	“Financial Statements—Notes to the consolidated financial statements—Note 35. Sensitivities”	210-211
	11(c) Interim Periods	Not Applicable	—
	11(d) Forward looking statement safe harbor	“Additional Information—Cautionary statement”	262
12	Description of securities other than equity securities
	12A Debt securities	Not applicable	—
	12B Warrants and rights	Not applicable	—
	12C Other securities	Not applicable	—–
	12D American depositary shares	“Additional Information—Shareholder information—Depositary payments to the Company”	252
		“Additional Information—Definitions and glossary of terms”	256-261
		“Material interest in American Depositary Shares”	“Further Information”
13	Defaults, dividend arrearages and delinquencies	Not applicable	—
14	Material modifications to the rights of security holders and use of proceeds	Not applicable
15	Controls and procedures
	15(a) Disclosure controls and procedures	“Additional information —Internal control and risk factors—Disclosure controls”	226
	15(b) Management’s annual report on internal control over financial reporting	“Additional Information—Internal control and risk factors——Internal control over financial reporting”	226
		“Corporate Governance Report—Audit & Risk Committee report”	100-104
	15(c) Attestation report of the registered public accounting firm	“Report of Independent Registered Public Accounting Firm—Audit opinions for Form 20-F”	“Further Information”

v

	15(d) Changes in internal control over financial reporting	None	226
16	16A Audit committee financial expert	“Corporate Governance Report—Our Board”	91-93
		“Corporate Governance—Audit & Risk Committee report—Committee financial experience”	100
	16B Code of ethics	“Additional Information—Other disclosures—Code of Ethics”	233
	16C Principal accountant fees and services	“Corporate Governance Report—Audit & Risk Committee report—External audit—External auditors' fees”	104
		“Corporate Governance Report—Audit & Risk Committee report—External audit—Non-audit services”	104
		“Financial Statements—Notes to the consolidated financial statements—Note 4. Other operating costs—(d) Auditors’ remuneration”	153
	16D Exemptions from the listing standards for audit committees	Not applicable	—
	16E Purchases of equity securities by the issuer and affiliated purchasers	“Additional Information—Shareholder information—Material interests in shares—Authority to purchase shares”	253
	16F Change in registrant’s certifying accountant	Not applicable	—
	16G Corporate governance	“Additional Information—Other disclosures—Corporate governance practices: differences from NYSE listing standards”	233-234
	16H Mine safety disclosure	Not applicable	—
	16I Disclosure Regarding Foreign Jurisdictions that Prevent Inspections	Not applicable	—
	16J Insider Trading Policies	“Insider Trading Policy”	“Further Information” and Exhibit 11(b)
	16K Cybersecurity Disclosures
	16K(b) Risk management and strategy	“Additional Information—Internal control and risk factors—Risk factors—Cyber or physical security breaches”	229
	16K(c) Governance	“Strategic Report—Our principal risks and uncertainties—Catastrophic security incident”	32
		“Strategic Report—Cybersecurity governance”	37
17	Financial statements	Not applicable	—
18	Financial statements
		Financial Statements—“Consolidated financial statements”	137-211
		“Financial Statements—Reports of Independent Registered Public Accounting Firm—Audit opinions for Form 20-F”	“Further Information”
19	Exhibits	Filed with the SEC	—

vi

We Bring Energy to

Power Possibilities

Annual Report and Accounts 2025/26

Welcome to National Grid

We Bring

Energy to Power

Possibilities

We are driven by our mission, safely and reliably

connecting millions of people to the energy they

use, while investing at scale to meet rising

demand, power economic growth and deliver

system resilience and energy security.

Read more on page 10

Strategic Report
1	2025/26 performance highlights
4	National Grid at a glance
6	Chair’s statement
8	Chief Executive’s review
12	Our business model
14	Our business environment
16	Performance against our strategic priorities
18	Our business units
23	Our stakeholders
26	Our key performance indicators
30	Internal control and risk management
31	Our Group Principal Risks
38	Responsible Business review
53	TCFD
69	Financial review
85	Section 172 and NSIS statement
86	Viability statement

Corporate Governance
88	Chair’s statement
89	Governance overview
91	Our Board
94	Key Board activities
95	Culture and workforce engagement
96	Board evaluation
97	Directors’ induction, development and training
98	Nomination Committee report
100	Audit & Risk Committee report
105	Safety & Operations Committee report
106	Responsible Business Committee report
107	Directors’ Remuneration report

Financial Statements
128	Statement of Directors’ responsibilities
129	Independent Auditor’s report
137	Consolidated financial statements
212	Company financial statements
Additional Information
220	The business in detail
226	Internal control and risk factors
233	Other disclosures
236	Other unaudited financial information
248	Commentary on consolidated financial statements
250	Shareholder information
256	Definitions and glossary of terms
262	Cautionary statement

Our reporting
Online content In this report there are QR codes you can scan to view further content online. Simply open the camera app on your smartphone to scan the code.
Further reading Throughout this report you can find links to further detail within this document.
Online report and other web content The PDF of our Annual Report and Accounts 2025/26 includes a full search facility. You can find the document by visiting our website nationalgrid.com/investors/ resources/reports-plc or by scanning the QR code below.
	Read this report online

National Grid plc  Annual Report and Accounts 2025/26	1	Strategic Report	Corporate Governance	Financial Statements	Additional Information
2025/26 performance highlights

Statutory operating profit 2024/25: £4,934m +10% y-on-y		£5,431m
Statutory earnings per share 2024/25: 60.0p +9% y-on-y			65.5p
Capital investment 2024/25: £9.85bn +18% y-on-y	£11.58bn
Dividend per share 2024/25: 46.72p +3.8% y-on-y			48.49p

Underlying operating profit 2024/25: £5,357m +6% y-on-y	£5,680m
Underlying earnings per share 2024/25: 73.3p +6% y-on-y	78.0p
Asset growth 2024/25: 9.0% +190bps y-on-y	10.9%
Alternative performance measure In addition to International Financial Reporting Standards (IFRS) figures, management also uses a number of alternative measures to assess performance. Definitions and reconciliations to statutory financial information can be found on pages 236 – 247. These measures are highlighted with the symbol above.		Reporting currency Our financial results are reported in sterling. We convert our US business results at the weighted average exchange rate during the year, which for 2025/26 was $1.34 to £1 (2024/25: $1.27 to £1).

National Grid plc  Annual Report and Accounts 2025/26	2	Strategic Report	Corporate Governance	Financial Statements	Additional Information
2025/26 performance highlights cont.

Network reliability 2024/25: 99.9% in line with prior year	99.9%
Lost time injury frequency rate per 100,000 hours worked 2024/25: 0.10 +10% y-on-y		0.11
Scope 1 and 2 GHG emissions in mtCO2e 2024/25: 7.4 +1.2% y-on-y		7.5
Employee engagement in our twice annual Grid:Voice survey 2024/25: 80% +100bps		81%

National Grid plc  Annual Report and Accounts 2025/26 3 Strategic Report Corporate Governance Financial Statements Additional Information

We Bring Energy

to Power Possibilities

Chair’s statement

page 6

Technology changes our existence –

and is inextricably linked to energy

National Grid is in the right place at the right time to take part

in the evolving energy landscape, with extensive grids in the

UK and US primed for expansion. We have announced our

intention to invest at least £70 billion over the next five years

to enhance our networks. This is an ambitious effort and

demands that we increase our agility, our productivity, and

our speed of technology adoption.

Chief Executive’s review

page 8

Energy is the foundation of modern economies and the

grid is the platform that makes energy usable at scale

The networks we plan, build and operate today will serve

customers for decades. The choices we make now,

on sequencing, design, capital discipline and system

architecture, will shape investment, resilience and

economic growth for a generation.

Responsible Business review

page 38

Responsible business is important to us and

our stakeholders

Over the past year, we have navigated a complex landscape

characterised by significant economic and political uncertainty.

In this environment, energy security and affordability remain

priorities. Part of being a responsible business is taking account

of, and responding to, the expectations of our customers,

communities, colleagues and other stakeholders.

National Grid plc Annual Report and Accounts 2025/26	4	Strategic Report	Corporate Governance	Financial Statements	Additional Information
National Grid at a glance

Infrastructure

at the heart of

energy systems

National Grid businesses play a vital role in energy

systems in the UK and US, connecting sources of

power to the customers that use them and shaping

the future of our critical energy networks.

See our business model on page 12 – 13

Our businesses
UK
UK Electricity Transmission (UK ET/NGET) We own and operate the high-voltage electricity transmission network in England and Wales. This connects and transmits electricity between generators, storage, large customers and distribution networks while delivering the major strategic infrastructure for a resilient and clean power grid.			UK Electricity Distribution (UK ED/NGED) We own and operate the UK's largest electricity distribution network, serving a population of 20 million people across the East Midlands, West Midlands, South West and South Wales. This includes a Distribution System Operator overseen by an independent panel.
		Read more on page 18			Read more on page 19

Our values

Do the right thing	Find a better way	Make it happen
–Stand up for safety every day –Put our customers first –Be inclusive, supporting and caring for each other –Speak up, challenge and act where something doesn’t feel right	–Embrace the power and opportunity of diversity –Increase efficiency to help with customer affordability –Work with others to find solutions for customers –Commit to learning and    new ideas	–Take personal ownership for delivering results –Be bold and act with passion and purpose –Focus on progress over perfection –Follow the problem through to the end

National Grid plc Annual Report and Accounts 2025/26	5	Strategic Report	Corporate Governance	Financial Statements	Additional Information
National Grid at a glance cont.

Our businesses
US						International
New York (NY) We own and operate electricity transmission, electricity distribution and gas distribution networks in Upstate and Downstate New York, delivering energy to 4.2 million customers (1.7 million electric and 2.5 million gas).			New England (NE) We own and operate electricity and gas distribution networks in Massachusetts, serving 2.3 million customers. We also own and operate electricity transmission networks across Massachusetts, New Hampshire and Vermont.			National Grid Ventures (NGV) We develop and operate large-scale energy projects across the UK and US. They represent a broad mix of energy assets and businesses, including six electricity interconnectors between the UK and Europe, US competitive transmission, power generation and battery storage.			Other activities Primarily National Grid Partners, the corporate venture capital and innovation arm of National Grid, plus UK property, insurance and corporate activities.
		Read more on page 20			Read more on page 21			Read more on page 22			Read more on page 22

2025/26 Regulatory asset value (RAV), rate base and other assets (% of Group)

2025/26 Underlying operating profit (% of Group)

2025/26 Capital investment (% of Group)

n

UK Electricity Transmission 34%

n

New England 14%

n

UK Electricity Transmission 30%

n

New England 15%

n

UK Electricity Transmission 38%

n

New England 17%

n

UK Electricity Distribution 18%

n

National Grid Ventures 4%

n

UK Electricity Distribution 22%

n

National Grid Ventures 6%

n

UK Electricity Distribution 14%

n

National Grid Ventures 1%

n

New York 27%

n

Other activities 3%

n

New York 30%

n

Other activities (3)%

n

New York 30%

Alternative performance measure

National Grid plc Annual Report and Accounts 2025/26	6	Strategic Report	Corporate Governance	Financial Statements	Additional Information
Chair’s statement

Paula Rosput Reynolds

Technology

changes our

existence –

and is inextricably

linked to energy

National Grid is in the right place at

the right time in this evolving landscape.

National Grid plc Annual Report and Accounts 2025/26	7	Strategic Report	Corporate Governance	Financial Statements	Additional Information
Chair’s statement cont.

“National Grid is a guardian

of the integrity and capability

of the energy system. It’s our

job to ensure that energy

grids in our regions – both

electricity and natural gas –

have the capability to

move energy to where it is

needed, when it is needed.”

Dear fellow shareholder,

At the very moment you are reading this letter,

more than five billion people around the world are

using the internet. In fact, three-quarters of the

global population are internet users. Yet there are

still two billion people, primarily in Central and

Eastern Africa and South Asia, who have yet to

experience what most of us take for granted. But

whether you are in New York or London, or in rural

Myanmar or on a remote island in Indonesia,

progress only moves one way. Technology

changes our existence – and is inextricably linked

to energy.

Technology saves energy, but it also creates the

need for energy. Artificial intelligence (AI) is the

classic example of both. AI has been years in

development, and it already operates within every

domain of the digital world. But it relies on

increasingly sophisticated microchips, which

consume more energy than early generations of

chips. Concerns about the proliferation of data

centres and how existing utility customers’ bills

might be affected are among the issues yet to be

fully resolved.

Against this backdrop, National Grid is a guardian

of the integrity and capability of the energy system.

We design, build and operate long lead-time,

capital-intensive infrastructure. It’s our job to

ensure that energy grids in our regions – both

electricity and natural gas – have the capability to

move energy to where it is needed, when it is

needed. Whether it’s connecting a wind farm in the

North Sea or providing natural gas to a new chip

fabricator in central New York, it’s our job to plan

for the future.

National Grid is in the right place at the right time in

At least

£70bn

capital investment over the

next five years

this evolving landscape. We have extensive land-

based electric power and natural gas grids in the

UK and US. With years of planning well underway,

these grids are primed for expansion. In addition,

we operate the most extensive subsea network of

high-voltage direct current (HVDC) interconnectors

in the world, linking the UK with Europe, with

further expansions planned. Given the complexity

of our networks, we are an early adopter of

technologies to make our grids more efficient.

Through sensors, automated controls, unmanned

surveillance, and AI, we are changing how

infrastructure operates. We both support the

energy requirements of AI and are a major user of

its capabilities.

National Grid has announced its intention to invest

at least £70 billion over the next five years to

enhance our networks. This is an ambitious effort

but, rest assured, our focus on safety and reliability

does not waver. The enormity of the challenge

demands that we increase our agility, our

productivity, and our speed of adoption. To this

end, in November 2025, National Grid welcomed a

new Chief Executive, Zoë Yujnovich, who

succeeded our long-serving leader, John

Pettigrew.

In this report, you’ll hear Zoë’s voice on how she is

bringing new perspectives, discipline, and energy

to National Grid.

No annual report issued by an energy company in

May 2026 would be complete without some

commentary on the situation in the Middle East.

The global disruption in the movement of

hydrocarbons through the Strait of Hormuz affects

all participants in the energy value chain.

Affordability for our customers remains a concern.

Efficiency – like the kind that Zoë is driving – is the

most powerful tool that we have to deploy.

Though we can debate the merits of how much AI,

and how quickly it is adopted, technology will

create opportunities we can only begin to imagine.

The geopolitics of the moment are troubling, but

the future is still bright.

Your ownership in National Grid underpins our

ability to deliver critical new transmission and

distribution infrastructure on two continents. On

behalf of the Board, I thank you for your continued

support of our company and our mission.

Paula Rosput Reynolds

Chair

13 May 2026

National Grid plc  Annual Report and Accounts 2025/26	8	Strategic Report	Corporate Governance	Financial Statements	Additional Information
Chief Executive’s review

Zoë Yujnovich

Energy is

the foundation

of modern

economies and

the grid is the

platform that

makes energy

usable at scale

National Grid plc Annual Report and Accounts 2025/26	9	Strategic Report	Corporate Governance	Financial Statements	Additional Information
Chief Executive’s review cont.

Energy is the foundation of modern economies,

and the grid is the platform that makes energy

usable at scale. For decades, it operated largely

out of sight. Today, it sits firmly at the centre of

national economic strategy, and it is not

moving back.

Across the UK and the north‑eastern United

States, there has been a fundamental shift.

Electricity demand is rising again after years of low

or negative growth. The large‑scale build‑out of

low‑carbon generation and storage, the

electrification of transport and industry, advanced

manufacturing and the rapid growth of artificial

intelligence are reshaping how and where energy is

produced and consumed. These shifts are also

influencing natural gas demand, particularly as

systems balance resilience with transition.

What has not changed is our responsibility: to

move energy safely, reliably, at scale and in real

time, from where it is produced to where it is

needed. What has changed is the urgency, and the

recognition that networks can either be an

essential catalyst for growth or a constraint.

The connection between supply and demand

depends on networks, that’s why National Grid sits

at the centre of national economic strategy.

National Grid is well positioned for this moment.

We operate extensive electricity and natural gas

networks across the UK and the north‑eastern US,

regions where demand is growing and the pace of

change is accelerating. Our networks are ready to

support expansion and modernisation. The

essential nature of what we do defines both our

responsibility and our opportunity.

Our value proposition is clear. We build, own and

operate high‑quality, regulated infrastructure that

supports economic growth, strengthens energy

security and delivers tangible benefits to the

communities we serve.

Our model offers investors exposure to sustained

long‑term growth in energy demand, without the

day‑to‑day volatility that can characterise other

sectors. The strategic nature of our assets is well

understood in investment circles, often described

as HALO: heavy assets, low obsolescence.

We are investing at unprecedented scale to

expand and modernise the networks that will

underpin this next phase of economic growth. At

the same time, we are determined to make better

use of the networks we already have and connect

customers faster.

As Chief Executive, I am clear about what this

moment demands: disciplined capital allocation,

excellence in execution and a culture that values

accountability as much as ambition. Growth

matters, but never at the expense of safety,

reliability, affordability or trust.

2025/26 financial

performance highlights

Capital investment1

£11.58bn

2025: £9.54bn +21%

Asset growth

10.9%

2025: 9.0% +190bps

Return on Equity

9.8%

2024/25: 9.0% +80bps

Underlying operating profit

£5.7bn

2024/25: 5.2bn +9%

Underlying EPS1

78.0p

2024/25: 72.0p +8%

Dividend growth in line with policy

48.49p

2024/25: 46.72p +3.8%

1.  Underlying results from continuing operations excluding

exceptional items, remeasurements, deferrable major

storm costs (when greater than $100m), timing, and the

impact of deferred tax in the UK regulated businesses

(NGET and NGED). Underlying EPS and

capital investment calculated at constant currency.

National Grid offers growth and resilience

	c.8-10%                              underlying EPS CAGR
High visibility growth –Unmatched visibility of investment and earnings –Multiple growth drivers –Critical infrastructure assets –Long-duration cash flows and low-risk returns	+	Resilient business model –Strong regulatory capabilities –Clear delivery track record –Strong balance sheet –Resilient to macro-economic volatility
	Progressive dividend
	=
	Aiming to deliver double-digit investor returns

National Grid plc Annual Report and Accounts 2025/26	10	Strategic Report	Corporate Governance	Financial Statements	Additional Information
Chief Executive’s review cont.

Over the past six months, I have mobilised our

senior leaders in a rigorous review of the business,

testing our ambition against industry-leading peers

and customers’ rising expectations of us. This

culminated in a refreshed strategic framework – not

a change in direction, but a clearer and more

effective way of translating strategy into delivery

across a complex organisation.

At its core is our mission:

we bring energy to power possibilities.

First, we are focusing on the operational

fundamentals: delivering our capital programme on

time and on budget; maximising asset

performance and reliability; providing a consistently

strong customer experience; and functions that

support the businesses effectively. We call these

the “brilliant basics” – where credibility is earned

and trust is built, because execution is what turns

investment into impact.

Second, we are driving three “big shifts” that will

improve performance and enhance delivery

capacity: strengthening leadership, capability and

performance management; scaling technology,

data and AI to unlock productivity and faster

connections; and stepping up our external

positioning and policy engagement to help

shape outcomes that work for our customers

and investors.

As system needs evolve, regulatory and policy

frameworks must evolve too. We are being more

focused and deliberate in shaping outcomes that

support affordability, resilience and growth for

customers, communities and investors, building

coalitions and taking clearer positions.

Affordability is central to everything we do. We

recognise the pressure that energy bills place on

households and businesses, and we take seriously

our responsibility to deliver our part of the system

as efficiently as possible. How we invest and

operate has a direct impact on what customers

pay, both today and over the long term. History

shows that under‑investment does not remove

cost; it merely defers and ultimately increases it,

through connection delays leading to lost

economic opportunity and higher system operating

and constraint costs.

Our refreshed strategic framework focuses our organisation

Our focus is therefore on getting more from the

networks we have, investing efficiently, making

trade‑offs transparent and maintaining discipline as

we grow.

Achieving this transformation at pace also depends

on effective policy and the right regulatory

frameworks. Strategic planning, efficient permitting

and fair cost allocation are essential. Rate impacts

perceived as unfair, or new loads that compromise

reliability, cannot be the outcome of this growth

cycle. We work closely with our regulators, who

challenge our thinking and help ensure we deliver

for customers. We are working towards a shared

objective: networks that are affordable, resilient

and support economic growth.

Delivering new infrastructure also means earning the

trust of the communities that host it. These are

long‑lived assets that create lasting national and local

benefits, but we are candid that construction and

maintenance can bring disruption and visual impact.

Engagement therefore matters as much as

engineering. We are raising our ambition by being

clearer about the benefits projects bring, innovating

to reduce impacts wherever possible, enhancing the

natural environment and ensuring communities share

in the value created, including through skills

development, apprenticeships and local employment.

Our people sit at the heart of this effort. Each year,

we bring hundreds of new colleagues into National

Grid. For many, this is not just a job, but the start

of a long‑term career. The next generation of

colleagues will operate networks that are more

flexible and intelligent than ever before. Data,

sensors, automation, advanced system design and

digital tools, including artificial intelligence, are

already changing how we plan, operate and deliver

work. These technologies help us unlock capacity

from existing networks, connect customers faster

and improve decision‑making, while maintaining

the safety and reliability on which our

reputation depends.

National Grid plc Annual Report and Accounts 2025/26	11	Strategic Report	Corporate Governance	Financial Statements	Additional Information
Chief Executive’s review cont.

“I am deeply grateful for the

opportunity to lead National Grid

through a period of profound

change. The networks we plan,

build and operate today will

serve customers for decades.”

In 2025/26, we increased capital investment by more

than 20% to £11.6 billion, driving asset growth of

10.9%. Higher operating profit, combined with lower

financing costs, increased underlying operating profit

to £5.7 billion, delivering 8% growth in underlying

earnings per share at constant currency, in line with

our guidance. And we grew our dividend by 3.8%, in

line CPIH inflation.

These results give me confidence in the quality of

our assets and the strength of the business. The

professionalism and dedication of my colleagues

make all of this possible, and I thank them for

another year of keeping energy flowing safely

and reliably.

I also want to thank our shareholders. In my first

months as Chief Executive, I have met with many

of you and listened carefully to your perspectives.

I have taken that guidance seriously, and I hope

you will see it reflected in this report and in the way

we are positioning National Grid for the future.

Five-year financial framework 2026/27 – 2030/31 announced 2 March 2026
Capital investment
	at least £70bn to meet decarbonisation and energy security goals and accelerating demand growth from data centres and industrial electrification
Group asset growth	Underlying EPS
c.10% CAGR1	8-10% CAGR2
1.Group asset compound annual growth rate from a 2025/26 baseline. Forward years based on assumed USD FX rate of $1.35:£1 and long run UK CPIH and US CPI assumptions. 2.EPS compound annual growth rate from a 2025/26 baseline. Forward years based on assumed USD FX rate of              $1.35:£1, long run UK CPIH, US CPI and interest rate assumptions and scrip uptake of 25%.

UK ET	c.£31bn
UK ED	c.£9bn
New York	c.£17bn
New England	c.£12bn
NGV	c.£1bn

I am deeply grateful for the opportunity to lead

National Grid through a period of profound change.

The networks we plan, build and operate today will

serve customers for decades. The choices we

make now, on sequencing, design, capital

discipline and system architecture, will shape

investment, resilience and economic growth for

a generation.

Energy will power the next economy. Networks will

carry it.

Our task is to build those networks safely,

efficiently and at the pace required, so that energy

can unlock the growth, innovation and resilience on

which modern economies depend.

Zoë Yujnovich

Chief Executive

13 May 2026

National Grid plc Annual Report and Accounts 2025/26	12	Strategic Report	Corporate Governance	Financial Statements	Additional Information
Our business model

Delivering today,

We operate and invest in regulated infrastructure

that supports economic growth while delivering

resilient returns for shareholders and benefits for

the communities we serve.

building for tomorrow

We deploy our resources effectively…
	Physical assets		Efficient financial capital		Strategic and responsible leadership		Expert colleagues
	Our network assets are critical infrastructure. They are large and built to last. We continuously invest to maintain and upgrade them to ensure safe and reliable service, integrate new sources of energy, and meet new demand.		We fund our business through a combination of equity and debt. We maintain an appropriate mix of the two and manage financial risks prudently, committing to a strong overall investment grade credit rating.		Our strategy positions our business to support growth, long-term economic benefits, and a cleaner future in the places we operate. We have well-established governance structures and controls in place to manage risk.		We are immensely proud of our people. Together we have spent decades installing and managing critical networks and systems, forging relationships, and building a culture of ambitious, diligent and passionate service.
		Read more on page 18		Read more on page 69		Read more on page 8		Read more on page 47

…and nurture our partner relationships…
With our customers, including the electricity generators that own the energy that flows through our networks.	With our contractors who have complementary skills, experience and resources to help us get the job done.	With national and regional governments and local communities who support us to deliver infrastructure that meets their needs.	With the regulators and agencies that agree the prices we can charge and the amounts we can invest, as well as the health, safety and environment standards we must meet.

National Grid plc Annual Report and Accounts 2025/26	13	Strategic Report	Corporate Governance	Financial Statements	Additional Information
Our business model cont.

…to shape the future of energy systems…

Generation and storage In the US, we own and operate fossil fuel electricity generation facilities on Long Island. We also operate modern solar and battery storage projects with NextEra Energy Resources on Long Island. Integrating cleaner energy Renewables and zero carbon sources play a critical and fast-growing role in our energy systems. Facilitating connections to a wide range of clean energy sources – including large-scale generation to local, customer-led generation and storage – is a fundamental part of our work. We earn a regulated return on the assets we build when extending our network to connect new energy sources. Interconnectors Interconnectors are high-voltage cables used to connect the electricity systems of neighbouring countries to allow the trading of excess energy and balance supply and demand to maintain security of supply. We operate six interconnectors linking the UK to France, Belgium, Norway, the Netherlands and Denmark. We sell capacity on our interconnectors to facilitate cross-border flow. Transmission Our transmission networks transport energy over long distances, safely and efficiently from where it is produced to distribution networks. We facilitate the connection of energy generation assets and large loads to our transmission systems and we charge generators and distributors for putting energy through our networks, based on prices set by regulators. Distribution and supply In the UK and US, we deliver electricity. In the US, we also deliver gas and act as a supplier. Our distribution networks take high-voltage electricity and high-pressure gas from the transmission networks, and deliver it at lower voltages and reduced pressures to homes and businesses. They also enable two-way flows as customers generate, store and export electricity locally. Through our UK Electricity Distribution System Operator (DSO) we ensure that supply and demand are coordinated and that local generation, storage and flexibility can be used to support the network.

Sources of energy

Networks and infrastructure

Delivering for customers

…to create lasting value and deliver positive outcomes for our stakeholders.

Customers Delivery of safe and reliable energy to customers in the communities we serve and provision of essential assets that connect energy generators to our transmission networks.	Investors A low-risk and dependable investment proposition, focused on generating shareholder value through dividends and asset growth.	Colleagues An inclusive and safe environment where colleagues can develop their skills and careers to reach their full potential.	Supply chain and delivery partners Responsible and efficient supply and delivery chains with aligned interests.	Communities Creation of jobs, skills and employability pathways, alongside charitable community work and the long-term benefits of reliable supply through infrastructure investment.	Political and regulatory Trusted relationships at national and regional levels to ensure alignment and delivery of our shared energy, growth and environmental objectives.
99.9%	78.0p	33,017	c.£8bn	52,620	£9,834m
Network reliability 2024/25: 99.9%	Underlying EPS 2024/25: 73.3p	Employees 2024/25: 31,645	Electricity Transmission Partnership launched in UK	Colleague volunteering hours 292,611 hours since 2021	Green capital expenditure1 2024/25: £7,667m

1. See definition on page 26.

Read more on our Principal Risks on page 31 — 36

National Grid plc Annual Report and Accounts 2025/26	14	Strategic Report	Corporate Governance	Financial Statements	Additional Information
Our business environment

Our business environment is being shaped by rising electricity demand, an evolving supply mix, and major

reforms which are changing how energy systems are planned, built and operated. Against a backdrop of

geopolitical uncertainty and rapid technological change, we are delivering the adaptive and reliable

infrastructure needed to support economic growth for customers and communities.

Energy supply

and demand

Shifts in energy supply and

demand are accelerating the need

for larger and smarter electricity

and gas networks. This is driven by

low-carbon generation, storage,

electric vehicles, electrification of

heating and industry, and

increasingly from data centres to

power AI. This is creating new

opportunities and reshaping where

and how capacity is needed.

Impact on our industry

–New generation continues to shift towards low-

carbon sources. In 2025, renewables generated

a record 52.5% of UK electricity and accounted

for nearly 88% of new generation capacity in the

US. The UK’s Contracts for Difference auction in

early 2026 secured 8.4GW of future offshore

wind capacity.

–Natural gas is expected to remain a key part of

the energy mix in the UK and US, playing a

critical role in managing renewable intermittency

and peak demand, as well as home heating.

–Electricity demand continues to rise in the UK

and US, driven by electrification of transport and

heat, and more recently, by the rapid growth in

data centres and advanced manufacturing.

These trends are reshaping long‑term network

planning and connection requirements.

–Battery storage capacity and other flexible

assets are reaching commercial scale, becoming

increasingly important for system balancing and

to avoid excess power going unused.

How we are responding

–National Grid is expanding and upgrading its

networks to keep pace with rising demand and

the shift to cleaner generation. In 2025/26, we

connected 1.8GW of new capacity across our

electricity networks.

–We are increasing the capacity of our electricity

and gas networks where demand is growing

fastest. In the UK, we are constructing a new

substation at Uxbridge Moor which is expected

to connect more than a dozen new data centres

to the grid from 2029.

–We are enabling our customers to connect and

operate flexible assets including solar, storage

and other technologies. In New England, we are

piloting new technology to help customer assets

come online faster and adjust output at times of

grid stress.

Technology

and innovation

Technology and innovation are

unlocking new ways to plan, build,

operate and maintain our

networks. They are transforming

the customer experience with

smart meters, flexible services and

better billing. AI is reshaping every

aspect of our business,

accelerating our ability to plan,

respond and deliver across our

electricity and gas networks.

Impact on our industry

–AI is creating opportunities to improve

operational efficiency across the value chain,

through enhanced grid intelligence, predictive

and autonomous maintenance, and customer

service. Across our operating areas, AI adoption

continues to accelerate, with increasing agentic

and autonomous applications.

–Grid-enhancing technologies, such as smart

sensors, are unlocking capacity on the existing

network by allowing optimisation of how much

electricity can be safely carried on power lines at

any moment.

–Customer-facing digital platforms are enabling

customers to manage their energy, lower bills

and track real-time outages. Utility companies

are responding with better apps and smart

software.

How we are responding

–We are upgrading and operating our

infrastructure with state-of-the-art technology

including dynamic line rating, digital twins and

drones. These technologies are transforming

how we plan and operate the network, easing

constraints and supporting faster connections.

–In the UK, we have installed dynamic line rating

technology on more than 600 km of electricity

transmission infrastructure, which has saved

£21m in constraint costs over the last five years.

–We are leveraging AI technology across our

businesses. Our collaborations with Emerald.AI

and GridCARE are helping to unlock additional

grid capacity and supporting our large load

customers, including data centres, to connect

faster. Our partnership with Rhizome helps us

identify and prevent wildfire risks across our

networks in the US and UK.

National Grid plc Annual Report and Accounts 2025/26	15	Strategic Report	Corporate Governance	Financial Statements	Additional Information
Our business environment cont.

Global

uncertainty

Economic and political uncertainty

continues to impact energy supply

around the world, making it more

important to focus on resilience

and security.

Impact on our industry

–Global conflicts are increasing uncertainty across

the energy landscape and countries are

refocusing on domestic energy security.

–Oil and gas markets remain volatile, as the UK

and Europe phase out Russian gas imports and

supply from the Middle East becomes

unpredictable.

–Trade disputes are increasingly unpredictable

with new tariffs impacting global trade and

supply chains and creating challenges for major

energy infrastructure projects.

–Transmission and distribution systems are under

pressure from physical and cyber security

threats.

How we are responding

–We remain focused on delivering resilient and

secure infrastructure – helping to reduce the risk

of disruption for the communities we serve.

–We participate in key working groups including

the Energy Networks Association in the UK and

the Edison Electric Institute and American Gas

Association in the US, to advocate for policies

that deliver a smooth energy transition.

–We are building resilience in our supply chains.

In the UK, our new supply chain partnership

model is propelling a c.£8 billion programme of

substation upgrades by providing exclusive long-

term contracts to regional suppliers.

–We are supporting the Northeast Supply

Enhancement (NESE) project to expand natural

gas capacity in Downstate New York,

strengthening energy reliability and supporting

economic growth for homes and businesses.

–We build resilience against the increase in

physical and cyber threats into our networks and

operations.

Affordability

and reliability

Affordability and reliability are

shaping customer and regulator

expectations of energy networks.

Households feel pressure from

persistently higher bills, while

business and industry navigate

increasing costs which impact

growth. Meanwhile, regulators are

strengthening their focus on

resilience and reliability of supply

as electricity demand grows,

extreme weather events intensify,

and systems become more

dependent on variable renewables.

Impact on our industry

–Customers are facing sustained pressure from

higher energy costs and inflation across many

consumer goods. Affordability remains at the

forefront of public expectations and policy debates.

–Grid reliability faces a dual challenge of ageing

infrastructure which requires accelerated

replacement while simultaneously absorbing

rapid growth in intermittent generation, large

demand loads, and flexible assets. The scale of

investment required to maintain and expand the

network is increasing, and customers expect

services that can withstand extreme weather

and rising peak demand.

How we are responding

–Since 2023, NGV’s subsea interconnectors have

saved UK customers more than £1.65 billion by

importing electricity from Europe, compared to

generating the same power from gas in the UK.

–In Upstate New York, we are offering $290

million in bill discounts and energy efficiency

improvements for income-eligible electric

customers. In New England, we provide eligible

low-income customers up to 70% off their bills.

–Our UK transmission network had a reliability

rate of 99.99999%. Since 2024, we have

replaced or refurbished over 1,000 assets

including transformers, switchgear and cables.

–On Long Island, New York, we provide reliable,

affordable electricity and critical support to the

tightening electric system. National Grid

Generation (operated by NGV) owns and

operates 3.8GW of power generation – about

65% of the island's total generating capacity.

–We prevented over 19 million minutes of

customer outages in Massachusetts and

13.5 million minutes in Upstate New York by

deploying fault location, isolation and service

restoration technology on our networks.

National Grid plc Annual Report and Accounts 2025/26	16	Strategic Report	Corporate Governance	Financial Statements	Additional Information
Performance against our strategic priorities

We have been

guided by five

strategic priorities   

in 2025/26

	See our key performance indicators on page 26 — 29
	See our business units on page 18 — 22

Business environment links
	Energy supply and demand
	Technology and innovation
	Global uncertainty
	Affordability and reliability

Enable the energy transition
Our networks play an important role in the energy transition. We work with policymakers, regulators and the wider industry to shape policy and regulatory frameworks needed to reach shared energy objectives.
1.8GW of new energised capacity connected across our power networks in 2025/26		Business environment:
		KPIs –Green capital expenditure –Climate change –Scope 1, 2 and 3 emissions
2025/26 achievements –We connected 1.1GW of energised renewable capacity to our networks across the UK and US. –In UK ET, we accepted Ofgem’s RIIO‑T3 Final Determination, locking in a 2026–31 framework that enables major expansion of our network and supports plans to nearly double capacity. The T3 contract incentivises timely completion of strategic projects and innovation. –In UK ED, we responded to Ofgem's ED3 Sector Specific Methodology Consultation, highlighting that transforming the UK’s energy system will require investment at an unprecedented scale, supported by a regulatory framework that enables economic growth, decarbonisation and strong customer outcomes. –In New England, we secured Massachusetts Department of Public Utilities approval for the cost recovery of Electric Sector Modernization Plan projects, balancing customer affordability with the state’s clean energy objectives. –In New York, we gained approval from our regulators for new rates at Niagara Mohawk and our Long-Term Gas Plan, supporting greater renewable integration and planning for the Northeast Supply Enhancement pipeline. –NGV announced the world’s first 100% hydrogen-fuelled commercial linear generator at Northport power plant.

Build the networks of the future now
We are scaling a once-in-a-generation increase in network capacity to connect and transport electricity. We are modernising our electricity networks to improve capacity, visibility, security and reliability, and drive economic growth. We will ensure the safety and reliability of our gas networks.
at least £70bn cumulative capital investment over our five-year financial framework to 2030/31		Business environment:
		KPIs –Group capital investment –Asset growth
2025/26 achievements –In UK ET, we advanced major construction activity across our portfolio, progressing delivery of the transmission infrastructure required to connect new generation capacity at pace. –In UK ED, we added 250MVA of capacity to our distribution network and are on track to deliver an increase in capital investment of over £100 million versus prior year. –In New England, we established strategic contractor partnerships to accelerate timelines, reduce risk, and lower costs across more than $3 billion of planned capital work over the next five years. –In the US, we have cumulatively installed over 2 million smart meters – covering 68% of customers in Upstate New York and 35% of customers in New England. –NGV is developing projects in the UK and US which will contribute to future capital investment. In the UK, NGV recently gained agreement on a regulatory framework for its LionLink hybrid interconnector project, which is planned to be delivered in partnership with TenneT. In the US, in conjunction with partners NY Transco and NY Power Authority, NGV are engaged with communities to gain support for NY Propel, a high-voltage enhancement to New York's electricity grid.

National Grid plc Annual Report and Accounts 2025/26	17	Strategic Report	Corporate Governance	Financial Statements	Additional Information
Performance against our strategic priorities cont.

Deliver for customers
We aspire to provide excellent service to all our customers, ensuring they can connect to the network in a timely fashion, that their energy provision is reliable, and that we are easy to do business with.
99.9% reliability across our UK and US electricity networks		Business environment:
		KPIs –Network reliability –Customer satisfaction
2025/26 achievements –Our UK and US networks maintained a high level of service reliability. Our UK transmission network had just one loss of supply event, the lowest number in ten years. –In UK ED, we are connecting new sources of renewable low-carbon generation to our network, increasing the total amount across our region to over 14GW. Our Vulnerability Strategy has supported over 21,000 customers to save £22m on their bills in 2024/25. –In UK ET, we drove Connections Reform with NESO, establishing a new delivery pipeline and prioritisation framework intended to speed up connections and to enable more efficient delivery of the transmission capacity required for Clean Power 2030. –In the UK, we modernised our contact centre by deploying Amazon Connect, improving service speed and management of service restoration after unplanned outages. –Across New York and New England, we replaced 315 miles of leak prone gas pipe. –In the US, we expanded access to emergency bill assistance, home weatherisation and energy usage education by partnering with more than 10 local organisations in New York and Massachusetts.

Operate safely and efficiently
To deliver our part in a changing energy system, we are transforming our internal processes, strengthening our customer focus and sharpening our commercial edge. We are investing in the capabilities we will need in the future and our ability to operate safely remains our top priority.
0.11 lost time injury frequency rate LTIFR)		Business environment:
		KPIs –Group LTIFR –Underlying EPS –Group RoE
2025/26 achievements –In UK ET, we improved operational efficiency by modernising how the network is controlled, including upgrades to our transmission control centre, alongside innovations including drones, use of AI, and dynamic line rating, the latter of which has saved £21m in constraint costs over the last five years. –During Storm Goretti, our UK ED business dealt with over 1,300 incidents and restored approximately 246,000 customers across the region. We also made over 97,000 proactive calls to the Priority Service Register (PSR). –Our New York and New England gas systems performed well during the extended winter storm season, keeping our customers warm during heavy snow and hurricane-force winds. Our power restoration efforts were recognised with Edison Electric Institute (EEI) Emergency Response Awards. –In NGV, our UK interconnectors delivered 90% availability across the fleet (up from 86% in 2024/25) and provide a total import capacity of 7.8GW. –Our LTIFR stood at 0.11, compared with 0.10 in 2024/25 and against our Group target of 0.10. In response, we have implemented targeted Group and business unit initiatives to strengthen risk awareness, leadership engagement and control effectiveness.

Build tomorrow’s workforce today
Delivering on our ambitions requires one big team. We're developing and recruiting for the skills and roles we need so we can build tomorrow's workforce today. From apprentices to leaders, we're creating the place to develop a career that positively impacts energy infrastructure and the planet.
703 graduates, apprentices and interns welcomed in the UK and US		Business environment:
		KPIs –Employee engagement index
2025/26 achievements –Across the UK and US, we welcomed 3,790 new employees during the year. –All new starters receive training on our mission, values and standards, supported by role-appropriate technical and leadership development. –Over half of vacancies continue to be filled through internal moves and promotions, reflecting our strong focus on developing and retaining talent. –In response to the scale and complexity of our capital program, we are working with the University of Oxford and the Saïd Business School to strengthen project management capability, improve delivery at scale and reduce risk across our major infrastructure programmes.  –Employee feedback matters and all permanent staff are invited annually to share their views on working at National Grid. Our employee engagement score remains strong at 81%.

National Grid plc Annual Report and Accounts 2025/26	18	Strategic Report	Corporate Governance	Financial Statements	Additional Information
Our business units

UK

UK Electricity

Transmission

Highlights

–Agreed the RIIO T3 price control, securing the regulatory

framework for April 2026–March 2031 and enabling up to

£31bn of capital investment.

–Delivered 2025/26 financial results in line or ahead of

expectations, with underlying operating profit up 18% year

on year and capital investment up 46%.

–Started construction of three new or significantly expanded

substations, including Uxbridge Moor, which is supporting

multiple data centre connections and is expected to be the

largest capacity substation in the UK.

–Launched the Electricity Transmission Partnership (ETP) to

strengthen supply chain relationships, capacity and

productivity, with c.£1.7bn already allocated to partners

under the framework.

Looking ahead

–Make submissions to Ofgem across the various stages of

the reopeners process for up to £14bn of additional funding

to deliver new connections and system reinforcements.

–Work closely with customers and industry partners to deliver

Connections Reform.

–Connect up to 35 GW of generation and 19 GVA of demand

through RIIO T3, supporting economic growth and

decarbonisation.

–Deliver the ASTI portfolio, enabling power flows from 50GW

of offshore wind across our network.

–Go live with our next generation Electricity Control Centre

and SCADA system.

Investment

Over the course of 2025/26, we have delivered £4.37bn of capital

investment. We are working to deliver up to £31bn capital investment

in our RIIO-T3 investment plan, acting as an engine for growth and

powering the country through the shift to a cleaner economy.

The volume of investment planned over RIIO-T3 will stretch our

supply chain, with transmission owners around the world upgrading

their grids. In July, we launched our Electricity Transmission

Partnership (ETP) to help power Britain’s clean energy future. This is

designed to unlock long‑term supply chain capacity and skills across

England and Wales. The ETP remodels how we engage with

suppliers, moving to a longer-term collaborative approach that builds

strong regional partnerships and rewards partners for high-quality

performance over time. It will accelerate the delivery of vital

substation infrastructure across England and Wales and support the

UK’s clean energy transition, with c.£8bn of substation construction

work to be awarded over the RIIO-T3 period across c.130 projects.

Work on our Accelerated Strategic Transmission Investment (ASTI)

projects continues at pace and the primary supply chain is now in

place for all 17 ASTI projects. We have made good progress on the

six ASTI projects where construction commenced in 2024/25. Our

ASTI portfolio is crucial to a lower carbon energy future and we are

working to minimise the carbon emissions from construction while

balancing that with the cost to the customer and delivery at speed.

We now model future emissions so that we can take action to reduce

our impact on the environment without delaying programmes.

Innovation

We are building a brand new, state-of-the art control centre to

manage the transmission network of tomorrow. This will reinforce

network resilience, uphold our world-class reliability standards and

power the clean energy transition. The control centre will use our new

SCADA (Supervisory Control and Data Acquisition) system, expected

to go-live in June 2027, providing real-time visibility and control of our

assets and allowing us to respond quickly to changing network

conditions and customer needs.

We are systematically testing new technologies and ways of working.

Over the course of 2025/26, we have worked with Hyperion Robotics

and the University of Sheffield on a UK‑first trial of low‑carbon

3D‑printed concrete substation foundations. If deployed across all

substations, this technology could save over 700 tons of concrete

and over 300 tons of CO₂ over ten years. In addition, we energised

over 300 km of Dynamic Line Rating (DLR) technology in 2025/26

and installed a further 300 km to enable the flow of more renewable

generation. Digital (weather-based) and sensor-based DLR has saved

consumers over £23.4m over the year and £230m over RIIO-T2. We

plan to install a further 260 km of DLR in 2026/27.

Customers

We are connecting new energy users as well as new sources of

renewable and flexible power to deliver secure, reliable and

increasingly decarbonised energy. Over the course of 2025/26, we

connected Britain’s largest solar array in Kent and the nation’s

biggest battery energy storage system at Tilbury substation.

We have long advocated for reform as critical to achieving the UK

Government’s Clean Power 2030 ambition. However, there are key

dependencies outside ET’s direct control. This year Ofgem has

approved proposals from the National Energy System Operator

(NESO) to reform Britain’s connection arrangements and prioritise the

energy projects that are most ready and most needed to meet the

country’s clean power targets. In addition, NESO has now published

the new connections pipeline, including details of the strategic

alignment of generation technologies to the UK Government’s Clean

Power 2030 capacity targets. We continue to work closely with

NESO to support the implementation of Connections Reform and are

now taking major steps towards having a better view of the future

needs of the transmission network.

Reliability and safety

The reliability of our network remains world-class. Network reliability was

99.99999%, with just one Energy Not Supplied event, the lowest number

in ten years. This is underpinned by delivery of asset health interventions

and maintenance compliance. Our new Enterprise Asset Management

(EAM) platform will support the transformation of our asset management

capabilities and management of an intelligent network with granular asset

data and a shared view of risk and total cost of ownership.

As we grow, maintaining a strong safety culture and ensuring

everyone is competent and confident in their roles is essential. We

narrowly missed our LTIFR target (0.11 vs a 0.10 target) but have

worked with our supply chain to enable growth and delivery while

embedding safety compliance, best practice and innovation.

People

Delivery of the energy network of tomorrow will require a significant

expansion of our workforce. We’ve made great progress in attracting

new talent. Our permanent headcount is now 4,718, with 712

experienced hires and 261 graduates and trainees joining over the

year. We’re investing in the future and expanding our training and

authorisation programmes. This year we have created new pathways

for colleagues to build critical skills, gain the right authorisations, and

take on work that matches their experience.

Read more about our business units on page 220

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Our business units cont.

UK

UK Electricity

Distribution

Highlights

–Maintained high Broad Measure Customer Satisfaction

score of 9/10.

–Our Vulnerability Strategy has supported over 21,000

customers to save £22m on their bills in 2025, and our

Winter Campaign drove a 71% increase on Priority

Services Register impact.

–Increased the total amount of generation connected to

our network to over 14GW.

–Enabled 120,000 low-carbon technology (LCT)

connections, including a 30% increase in EV chargers.

–Delivered a material increase in our Distribution System

Operator’s (DSO) flexibility market offerings – registering

309,514 of flexibility assets and securing 3,064MW of

flexibility capacity available to dispatch.

–The EQUINOX trial, one of the UK's largest domestic

heat pump flexibility programme, delivered 8,000+ heat

pumps into business-as-usual flexibility markets

alongside Octopus Energy and Scottish Power.

Looking ahead

We remain focused on developing a strong, region-led ED3

business plan for the period out to 2033 that delivers for

customers, supports growth, and enables the region’s net

zero transition in an efficient and affordable way. We will

continue our engagement with customers, communities

and stakeholders as we refine our proposals, ahead of

submitting our final ED3 business plan to Ofgem in

December 2026.

Investment

Every day, we work to provide safe, reliable electricity, connect

customers to the energy they need, and create the network capacity

required for a cleaner, more flexible energy system in an evolving

climate and market.

In 2025/26, we remained focused on investing at pace to expand

capacity and enable the region’s growth and net zero ambitions. We

delivered record capital investment, up 13% year-on-year. We are

connecting new sources of renewable low-carbon generation to our

network, increasing the total amount across our region to over 14GW

and increased capacity in our secondary network by 250MVA (a 39%

increase on the previous year). We also continued to shape the

evolving regulatory framework, responding to Ofgem’s ED3 Sector

Specific Methodology Consultation and submitting Early Proposals

that emphasised the need for focusing on customers’ needs and the

role of the DSO as we deliver unprecedented investment levels to

support the UK’s clean power transition. We are pleased that seven

of these early proposals have been taken forward by Ofgem.

Innovation

Innovation is at the heart of our strategy to deliver greater value to

customers. Through initiatives such as the deployment of monitors

across the low-voltage network, we are enhancing network

management and swiftly locating faults. Our adoption of AI

technologies is specifically targeted at improving customer

experiences, with predictive analytics forecasting scores for customer

service, automated curtailment reporting that will streamline project

lifecycles, and an AI-powered chatbot making data on our public data

portal more accessible and understandable. Our use of AI is also

supporting improvements in our DSO, ensuring the final outputs

better meet customer expectations, which include visibility and

access to our flexibility markets and products that have grown

significantly this year. These advancements collectively demonstrate

our ongoing commitment to utilising innovation to unlock customer

benefit.

Customers

UKED plays a vital role in keeping over 8 million homes and

businesses powered and supporting the region’s growth. In 2025/26,

we placed a strong emphasis on enhancing customer service and

engagement. We achieved a Broad Measure Customer Satisfaction

score of 9/10, thanks in part to the modernisation of our contact

centre through the roll-out of Amazon Connect and the complete

digitisation of agent knowledge with a new knowledge management

platform. We also improved customer journeys for unplanned

outages and connections, making it simpler for customers to access

information and support whenever they need it.

During the year, we responded proactively to a number of severe

weather events, mobilising teams to restore supplies safely and

keeping customers informed throughout. Notably, we acted quickly

during Storm Goretti, one of the worst storms on record to

specifically hit the South West. The South West saw winds of over

90mph, the biggest storm in the region for two decades. We

recorded over 1,300 incidents related to Goretti, with approximately

246,000 customers impacted; impressively, 73% had their supply

restored within 24 hours.

Our commitment to customer engagement extended beyond

immediate service improvements. Ahead of ED3, we launched our

BIG Conversation initiative, engaging directly with customers and

stakeholders, and established our Independent Stakeholder Group to

ensure our business plan is customer led and reflects regional

priorities. Furthermore, our largest ever winter campaign achieved

record engagement, driving a 71% increase on Priority Services

Register impact and in 2025, we earned the accolade of Campaign

of the Year at the Energy Awards 2025.

Reliability and safety

Maintaining a safe, resilient and reliable network remains central to

our 2025/26 performance. We delivered network reliability of

99.98795%. We strengthened our safety culture and learning,

training operational leaders and safety professionals in incident

investigation and root cause analysis to enhance the quality of

investigations and the actions that follow. We also made progress on

safety performance, with our LTIFR decreasing year-on-year as we

continue to work towards our strong safety target of less than 0.10.

People

We continued to invest in our workforce, building the capability and

capacity needed to deliver a safe, reliable and growing regional

network. We strengthened our teams through targeted recruitment

and development, supporting colleagues to build the skills required

for an increasingly complex energy system and the delivery of our

ambitious investment programme.

Read more about our business units on page 220

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Our business units cont.

US

New York

Highlights

–New York delivered strong performance across its 26,400

square mile service territory. We met or exceeded key reliability

targets, delivered record gas throughput during extremely cold

temperatures, and continued to invest in a smarter and more

reliable energy system for our customers.

–The Public Service Commission (PSC) unanimously approved

Niagara Mohawk’s joint proposal, establishing a three-year

electric and gas rate plan. The agreement authorises

approximately $5.5 billion in capital investment, delivers more

than $290 million in bill discounts for income eligible customers,

and strengthens Climate Leadership and Community

Protection Act (CLCPA) aligned grid modernisation and storm

resilience.

–In September, the PSC affirmed that the proposed Northeast

Supply Enhancement (NESE) project is necessary to enhance

reliability and resilience of the downstate gas system. We also

helped shape the New York State Energy Plan, which

recommended a diversified approach that expands renewables

and invests in electric and gas infrastructure.

Looking ahead

Our priorities are clear: delivering safe, reliable, affordable

energy to the millions of customers who depend on us every

day; raising the bar on customer satisfaction; executing our

capital programme efficiently and safely; accelerating the pace

of connecting new customers to our networks; and advancing

regulatory and policy outcomes that serve the long-term

interests of both our customers and business – all the while

maintaining disciplined investment and continuing to

modernise how we operate.

Investment

We delivered approximately $4.6bn in capital investment, up $440m

year-over-year, and remain on track against our $23bn five-year

capital framework. Under the approved KEDNY and KEDLI rate

plans, we replaced over 220 miles of leak prone pipe to modernise

gas infrastructure. The Upstate Upgrade progressed, with Smart Path

Connect energised, enabling large-scale renewable interconnections

and strengthening transmission resilience. Climate Leadership and

Community Protection Act (CLCPA) Phase 1 and 2 are progressing,

with major construction and material contracts awarded, ready to

support renewable growth and improved reliability for our 1.7 million

upstate customers.

Innovation

Innovation centred on modernising operations for our workforce. We

launched Gas Business Enablement in Downstate New York,

streamlining daily work, improving field execution, and elevating

customer interactions by embedding digital innovation across gas

operations. We successfully deployed horizontal directional drilling at

Greenpoint LNG facility using a laser guided boring machine to

complete a fully trenchless installation of foundation heating elements

beneath an active LNG tank. This approach minimised disruption,

maintained operational integrity, and enhanced long-term reliability.

In our electric business, we exceeded deployment targets for fault

location, isolation and service restoration (FLISR), reducing customer

minutes interrupted by more than 13.5 million and supporting over

290,000 customers. We reduced interconnection times for electric

vehicles and distributed energy resources (DERs) by 10% and

advanced remote sensing, including drones for data capture and light

detection and ranging (LiDAR) for vegetation management.

The gas business leveraged advanced technologies to enhance

pipeline inspection. With the use of robotic internal inspection tools,

we can assess pipelines in previously inaccessible locations, reducing

inspection costs while strengthening reliability and system integrity. In

response to recent federal rulemaking, we have also been an early

adopter of non‑destructive technologies that determine pipeline

material properties without physical sampling, conserving resources

and supporting compliance with evolving regulatory requirements.

We have made strong progress in advancing our approach to large

load growth where demand from data centres and advanced

manufacturing continues to increase. We are focused on accelerating

speed to power through a combination of interconnection process

improvements, digitising the customer connection journey, and

flexible connections.

This year we also launched the Kraken programme, a cutting-edge

customer information and relationship management platform. This

innovative step forward will transform the way we interact with and

serve all of our US customers, driving significant advances in

operational efficiency and service quality.

Customers

We earned three Edison Electric Institute (EEI) Emergency Response

Awards for restoration efforts following severe storms in Upstate New

York. We responded to twelve major storms, restoring service for

95% of impacted customers within 7.94 hours.

We launched an after-call survey via text message to capture real-time

customer feedback and improve digital experience. We continue to

install Advanced Metering Infrastructure (AMI), with over 1.5 million

meters now completed, reaching 67% of Upstate customers. AMI will

improve outage response, customer insights, and operational efficiency.

Our Grid for Good Initiative delivers community benefits and during

the Annual Day of Service, 1,167 volunteers served at 38 events

across New York.

Reliability and safety

We delivered exceptional reliability performance, achieving Customer

Average Interruption Duration Index (CAIDI) and System Average

Interruption Frequency Index (SAIFI) targets for the 18th consecutive

year, the only New York utility in the state to do so. During the

extended historic cold winter in 2026, the downstate network

recorded six of the ten highest gas throughput days in KEDLI’s

history, underscoring resilience during peak demand.

Safety performance remained a core strength. The New York Electric

team achieved zero switching errors across nearly 110,000 switching

steps. We advanced proactive safety practices through Digital Job

Briefs, improving hazard recognition and consistency in field

execution. We deployed telematics across nearly 10,000 vehicles,

giving more than 1,500 daily users improved fleet visibility and safety

performance that outpaces peers. We ended the year with an LTIFR

of 0.11.

People

We continued to strengthen our workforce through meaningful labour

engagement and investments in our employees and workforce

pipeline. We reached a four-year collective bargaining agreement with

members of IBEW Local 1049, a labour union, providing stability and

reinforcing our commitment to collaboration and safety. We were

awarded the Bell Seal for Workplace Mental Health, the highest level

of recognition with Platinum status from Mental Health America.

Read more about our business units on page 220

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Our business units cont.

US

New England

Highlights

–Improved customer satisfaction (CSAT) significantly while

reducing complex connections cycle time by

approximately 10%.

–Announced partnership with Kraken to replace customer

platform.

–Replaced 95 miles of leak prone pipe.

–Completed construction of the VT-NH portion of the

A1B2 project, upgrading a transmission line in service

since 1909.

Looking ahead

Moving forward, our priorities remain: significantly

enhancing customer performance, obtaining regulatory and

policy results that benefit our customers, fulfilling our capital

commitments, and continuing to strengthen our safety

plans that support everything we do.

Investment

We invested $2.7 billion in 2025/26, $500 million more than last year,

to deliver a smarter, stronger, cleaner electric grid and to ensure the

safety and reliability of our gas system. To deliver projects in our

electric business, we stood-up strategic contractor partnerships for

transmission line, substation and distribution work that will allow us to

build long-term strategic relationships with selected suppliers. We

expanded our FLISR capability to 34% of customers, enabling self-

healing networks and avoiding over 19 million minutes of outages.

Construction was completed on the Vermont-New Hampshire portion

of the A1B2 asset condition replacement transmission project that is

upgrading a line which has been in service since 1909.

Natural gas plays an essential role in the Commonwealth’s all-of-the-

above energy strategy, providing a reliable foundation for economic

growth, helping to meet rising demand, and keeping customer bills

affordable. That energy mix requires continued investment to ensure

safety and reliability. We replaced 95 miles of leak prone pipe to

improve network safety and reduce emissions. Additionally, we

awarded the contract for the Tewksbury Vaporizer project, which will

replace ageing LNG vaporisation equipment, and are undertaking a

$283m investment to replace the South Yarmouth LNG storage tank,

both of which are essential to assure peak day reliability on the

natural gas system.

Innovation

We are using AI across the business. For example, we implemented

the NICE CX One platform in our contact centres and AI is now

evaluating 100% of calls and directly linking call quality to customer

satisfaction. In our electric business, we partnered with AiDASH to

use satellite imagery and AI to predict and remove vegetation threats,

reducing outages by nearly 30%.

This year we also launched the Kraken programme, a cutting-edge

customer information and relationship management platform. This

innovative step forward will transform the way we interact with and

serve all of our US customers, driving significant advances in

operational efficiency and service quality.

Customers

The business made significant gains in customer service and

operations: customer satisfaction (CSAT) increased significantly year

over year to 72% while after-call survey scores increased 22%, and

complex connections cycle time dropped by approximately 10% this

year, following last year’s 10% reduction. We also connected over

160MW of distributed energy resources, enabled the installation of

41MW of EV charging infrastructure, and have now installed nearly

500,000 AMI (smart meters). Our management of storms continues

to be recognised for exemplary performance, including an emergency

response award from the EEI. We continue to make day-to-day

operational improvements as we pursue breakthroughs aligned with

our broader strategy to transform the customer experience.

As part of our most recent electric rate case, we developed a first-of-

its-kind tiered income discount rate to better align bill support with

household need. We proposed a similar tiered income discount rate

rate for gas customers as part of our gas rate case, and are now

working with the Massachusetts Department of Public Utilities,

government, community agencies, and other utilities to develop a

standardised tiered low income discount programme for all

Massachusetts customers.

Reliability and safety

On our electric network, performance remains strong; our reliability

puts us in the 1st quartile for System Average Interruption Duration

Index (SAIDI) and the top of 2nd quartile for System Average

Interruption Frequency Index (SAIFI) when using Institute of Electrical

and Electronics Engineers national criteria. In the gas business, we

continued our high leak response performance with over 99% of

odour calls responded to within 60 minutes, compared to a statutory

target of 97%. The gas distribution system demonstrated its

importance to the region once again, performing well during a cold

and snowy winter with our LNG assets supporting over 20% of our

supply portfolio during periods of peak demand.

Safety remains fundamental to our operations. Incident rates remain

low overall, with LTIFR at 0.09 and an Occupational Safety and

Health Administration (OSHA) recordable rate of 1.64, approximately

14% below the three-year average. However, there is opportunity to

improve, and we will continue to mature high-energy awareness and

controls, bolster first-and second-line assurance, strengthen

contractor oversight and readiness, and improve learning quality.

People

Our Strategic Workforce Development team leverages partnerships

between community-based training providers, colleges and

universities and vocational technical schools to create and develop

short, medium, and long-term talent pipelines to fill critical roles. This

year we welcomed UMass Lowell, a Research 1 public university with

a deliberate strategy to partner with industry, to the cohort. Since

inception in 2023, approximately 150 graduates have joined our

company in critical roles, with 21 promotions in the current year.

Read more about our business units on page 220

National Grid plc Annual Report and Accounts 2025/26	22	Strategic Report	Corporate Governance	Financial Statements	Additional Information
Our business units cont.

International

National Grid

Ventures

Highlights

–National Grid Ventures (NGV) develops, builds, and

operates energy assets and businesses in the US and

through its interconnectors business in the UK. It drives

growth for the organisation through investment in new

projects, with earnings underpinned by stable long-term

regulated frameworks and contracts.

–In 2025/26, NGV sold two of its businesses, National

Grid Renewables in the US for approximately $2.1 billion

and Grain LNG in the UK.

Looking ahead

NGV looks to continue to grow its businesses on both

sides of the Atlantic. This year, NGV signed memoranda of

understanding with both TenneT Germany and EirGrid to

explore developing hybrid interconnector projects with

Germany and Ireland respectively. NGV US continues to

progress its competitive transmission strategy with more

bids anticipated to be submitted as part of its new

partnerships in the coming year.

Investment

In addition to its large fleet of operational assets, NGV is actively

developing projects in the high-voltage transmission markets in both

the UK and the US, which will contribute to future capital investment.

NGV operates six HVDC interconnectors with a total capacity of

7.8GW, connecting the UK to France, Belgium, the Netherlands,

Denmark, and Norway. With LionLink, an upcoming major capital

project in partnership with TenneT Netherlands, NGV is planning for

the construction of a first-of-its-kind hybrid interconnector which

would connect the UK and the Netherlands. The project reached a

major milestone this year, gaining agreement for a regulatory

framework with Ofgem.

NGV US operates 3.8GW of conventional generation assets across

its sites in Long Island, New York. In addition, NGV US owns and

operates the Providence Rhode Island LNG peak-shaving plant which

provides approximately 2 billion cubic feet of LNG storage capacity,

along with vaporisation and liquefaction capabilities. NGV US owns

part of the NYTransco joint venture, which oversees $1bn worth of

transmission assets. NGV has a growing competitive transmission

business in the US and has formed its first partnerships to bid for

transmission projects across multiple transmission markets.

Innovation

This year, NGV US announced it will install the world’s first 100%

hydrogen-fuelled commercial linear generator at Northport power

plant to demonstrate the capability of H2 generation with a small-

scale pilot project. NYTransco is currently progressing Propel NY, a

capital project aimed at strengthening the electric connections

between downstate and upstate New York.

In the wake of rapidly growing energy demand across the UK and

Europe, NGV partnered with RenewableUK in chairing the new

Multipurpose Interconnector (MPI) task force, which published its

report and recommendations on how to enable delivery of MPIs in

January 2026. NGV is now working with industry and regulatory

leaders to progress the recommendations made in the report.

Customers

This year showed a strong performance for NGV in terms of

delivering for customers. In the US, the generation business was

required to deliver significant additional capacity as a result of the

seasonal cold weather this winter. From December 2025 through

February 2026, the generation fleet produced 36% higher energy

output than the prior four-year average, including a 260% increase

from 2025 in steam generation during the cold-snap that affected the

US Northeast from 23 January to 9 February 2026.

On 2 March 2026, NGV received a final FERC Order approving the

rate case settlement for the LNG facility in Providence, RI. The rate

case allows the facility to continue to add critical capacity to the

gas system.

February 2026 marked the energisation of the Dover Station

substation in Dutchess County, New York, which was delivered by

NGV’s NYTransco joint venture. This upgrade is allowing for

increased power flows and system improvements, demonstrating the

value of modernised energy systems.

Reliability and safety

Availability across the interconnector portfolio was 90%, exceeding

the full-year target with a 4% improvement from 2024/25. To further

improve reliability in the future, NGV is working towards modernising

the IFA interconnector in the coming years along with resilience

initiatives spanning the entire fleet.

In the US, Providence LNG is embarking on a modernisation effort to

improve the efficiency and reliability of the plant.

NGV operates with safety always top of mind for all colleagues,

across all business areas. LTIFR was on target this year at 0.10.

Across the organisation, efforts to centre leading indicators at the

heart of safety discussions have been adopted to foster a proactive

safety culture.

People

To support the progress of National Grid’s growth ambitions, NGV

utilises a broad mix of talent, from business originators to skilled

asset operators. NGV continues to build capability in the competitive

transmission space by bring in new talent and ensuring growth

opportunities for existing talent.

Read more about our business units on page 220

Other activities

Other activities primarily relate to National Grid Partners, the

corporate venture capital and innovation arm of National Grid, as well

as UK property, insurance and corporate activities. In 2025/26,

National Grid Partners invested in three new portfolio companies and

16 follow on rounds. We exited one company, Urbint, during the year.

We now have 41 active companies in the portfolio investments in five

strategic venture funds. We have invested more than $550 million to

date. Some examples of companies and technologies in our portfolio

include: LineVision (dynamic line rating technology), Sensat (capital

project design software) and Emerald.ai (demand flexibility software

for data centres). Looking ahead, we will continue to innovate and

invest in the latest technologies to support the Group.

National Grid plc Annual Report and Accounts 2025/26	23	Strategic Report	Corporate Governance	Financial Statements	Additional Information
Our stakeholders

Strong stakeholder engagement

Read our Section 172 Statement on page 85

drives our success

How we engage

Our stakeholder community continues to broaden and evolve, and engaging with them remains fundamental to our daily operations. We focus on timely, effective engagement on the issues and decisions that matter

most to them, with the right colleagues leading each interaction. This spans the full organisation – from our Board of Directors, who maintain regular dialogue with key stakeholders, to the working‑level teams who

support engagement on our day‑to‑day activities. The insights we gain through these interactions directly inform the decisions that shape and deliver our strategy. Structured reporting mechanisms ensure that

information flows seamlessly from stakeholders to the Board and its Committees, helping us understand what we are hearing and enabling us to act on it.

Customers

Why our customers are important to us

Customers are the heart of our business,

representing a diverse community that includes

residential customers and large and small

businesses. Regular and effective engagement with

them is essential to delivering what they need and

expect from us.

Interests

Our customer base, made up of longstanding

customers and an increasing number of new ones,

have wide ranging interests. However, they all

share an expectation that we will deliver efficient,

reliable and affordable service, with transparency

and fairness in how we work with them. We strive

to understand their needs and challenges, along

with how our activities impact their daily lives and

businesses.

Our engagement

–The Board and Group Executive Committee

actively engage on customer matters to better

understand their needs and perspectives and

leverage that feedback into improving customer

experience.

–Strategic account teams have gained

momentum in 2025/26, positioning themselves

as trusted advisors who bring innovative

strategic solutions that can deliver at speed to

accelerate customers’ expansion opportunities. 

–We lead or participate in industry initiatives to

find solutions for: general business planning,

expedited grid connections, and affordability

challenges faced by our customers.

Investors

–The Board receives regular updates on customer

matters and undertook two customer deep dives

during the year, including updates on the

implementation of the Kraken programme which will

enhance US customer experience and an

operational visit of the UKED customer call centre.

–Teams  across  the  business  engage  with

 customers on a day-to-day basis – in one-to-one

meetings and community forums – regarding

 connections, bill-related matters  and social

obligations.

Outcomes

–Our customer engagement helps shape what we

do both operationally and strategically.

Understanding our customers means we can

better meet their needs for new connections and

ongoing account management, and informs

longer-term policy.

–As companies increasingly adopt advanced

technologies, resilient, high-quality power and the

ability to timely connect new loads have become

paramount.

–In the US, our work with consumer advocates

continues to make a difference to many of our

customers’ ability to meet the rising challenge of

cost of living.

–In 2025 we launched our BIG conversation –

engaging with thousands of customers and

stakeholders on the future of their local electricity

network. This engagement will continue

throughout 2026/27 and is key to shaping our

future business plan.

Why our investors are important to us

We engage with equity and debt investors on our

strategy and performance. Their involvement

supports the investment needed for a resilient,

future-ready network and provides important

accountability — ensuring we remain transparent,

disciplined, and aligned with our long‑term

commitments.

Interests

Investors look to our financial and operational

performance as indicators of our capacity to

generate attractive returns and uphold

creditworthiness. They are also interested in our

Responsible Business commitments and reporting

to ensure their investments are sustainable, ethical

and responsible.

Our engagement

–During the year, the Chair, Chief Executive and

CFO met with institutional investors in the UK

and overseas as part of our comprehensive

investor relations programme.

–The Group Treasurer and Deputy Group

Treasurer met with Debt and Fixed Income

investors in the UK and overseas as part of our

debt engagement programme.

–Meetings followed our full and half-year results

and the announcement of our updated five-year

financial framework and acceptance of Ofgem’s

RIIO-T3 price control in March 2026.

–The Board engaged with shareholders at our

2025 AGM, which was held as a hybrid meeting

to enable participation both in person and online.

Shareholders were able to put questions to the

Board in advance of, or during, the meeting.

–The Board receives regular monthly updates on

investor relations matters from the Director of

Investor Relations, including the outcome of an

investor sentiment exercise which affirmed our

investor relations approach.

–Debt investors received an overview of our US

regulated businesses from the Group Treasurer

along with the Presidents and CFOs of our US

businesses.

–Held an investor event in May 2025 that shared

full-year results with a focus on major projects in

UK ET and New York.

Outcomes

–Through our engagement, investors understand

our investment case and have visibility of our

strategy, performance and financial strength. This

engagement helped us to efficiently access new

debt and equity funding during the period,

including £4.2 billion of newly issued senior debt.

–The Remuneration Committee considered

feedback from its engagement with investors in

relation to the Directors’ Remuneration Policy,

with 98.38% of voting investors voting in favour of

the Policy at the AGM.

National Grid plc Annual Report and Accounts 2025/26	24	Strategic Report	Corporate Governance	Financial Statements	Additional Information
Our stakeholders cont.

Colleagues

Why our colleagues are important to us

We listen to and engage extensively with our

colleagues and with the bodies that represent them

through several channels and processes. This

enables us to understand their needs and

requirements and build a culture that not only

drives our performance and shapes our plans, but

also empowers colleagues to take ownership for

delivering results. Through fostering an inclusive,

supportive and collaborative environment, we

create the conditions for a skilled and motivated

workforce where everyone feels valued and able to

contribute to our shared success.

Interests

Colleague interests are wide-ranging. They have an

interest in company performance and what this

means for them individually, but also want to

understand – and play a part in – shaping our role

in the industry, contributing to our social impact,

and supporting the delivery of our strategic

objectives.

Our engagement

We continued our extensive programme of

colleague engagement in 2025/26. This included:

–Twice yearly live webcasts to all employees

hosted by the Chief Executive.

–Regular Chief Executive posts and interaction on

social media platforms.

–Regular all-hands calls hosted by members of

the Group Executive and senior management.

–The Chair visited two training facilities during the

year, one in the UK and one in the US.

–The Chair and members of the Board visited

operational sites in the UK and US, including a

segment of the ASTI transmission facilities under

construction in July and the Long Island Power

plant facilities in March, to observe work

underway and engage in small group

conversations with key team members.

–

Supply chain and delivery partners

–A series of colleague engagement events were

hosted by the Chair of the People &

Remuneration Committee to discuss reward

structures and talent development. Please see

page 95 for further information.

–Operational site visits by senior management.

–The Chief Executive and Chief People Officer

provided regular updates on employee matters to

the Board, including the results of our twice-

yearly employee engagement survey, Grid:Voice.

Outcomes

–Direct engagement informed Board challenge

and discussion, reinforced the importance of

visible leadership and open dialogue, and fed into

Safety & Operations Committee consideration of

safety reporting, contractor management and on-

site safety behaviours.

–Direct engagement enabled the Board to hear

directly from a broad cross-section of colleagues,

strengthening its understanding of workforce

culture, values and lived experience beyond

formal reporting.

–82% of colleagues took part in our Grid:Voice

survey in February, with an employee

engagement index score of 81% favourable. The

results and feedback helped to identify areas

where we could do more to support employees.

	Read more in the Responsible Business Committee report on page 106
	Read more about Board engagement with colleagues on page 95

Why our supply chain and delivery partners

are important to us

Working closely with our supply chain and delivery

partners is essential to delivering our long‑term

ambitions. Through strong partnerships and

consistent engagement, we share insights, drive

innovation, and build the resilience needed to meet

changing expectations. This coordinated,

transparent approach ensures a future‑ready

supply chain that supports effective delivery of our

commitments.

Interests

Effective communication and strong coordination

are essential to how we work with our supply chain

and delivery partners. Clear forward visibility and

longer‑term commitments help us plan and

support partners in building the skills and capacity

they need. Early alignment and consistent dialogue

foster collaboration and innovation, enabling us to

meet evolving needs and deliver successful

outcomes.

Our engagement

–Structured and timely engagement takes place

with strategic suppliers and contractors,

complemented by Executive-sponsored senior-

level engagement to foster collaboration and

discuss strategic issues facing the sector.

–Continued collaboration between UK operators

and suppliers through an industry skills and

workforce planning group, consisting of

representatives from key external partners, to

address the industry skills gap challenge

through a focus on critical specialist workforce

roles.

–The Board receives updates on our supplier

engagement programmes via business unit

updates during the year.

–

–We engage in detailed safety forums with

suppliers to drive industry-wide safety

performance.

–In New England, we established strategic

contractor partnerships to accelerate timelines,

reduce risk, and lower costs across more than

$3bn of planned capital work over the next five

years.

–In the UK we entered into a novel long-term

contracting relationship, the Great Grid

Partnership. Members of the Board visited with

the Great Grid Partnership in July 2025, including

presentations from partners to understand

strategic supply chain management.

–The Board considered and approved the Group’s

Modern Slavery Statement.

Outcomes

–Sharing key priorities with our supply chain and

gaining a better understanding of their needs

allows us to jointly manage continuity of supply

and shape our approach to future challenges,

such as the acceleration of investment required to

connect new sources of energy.

–Working with other energy network operators and

suppliers, we have contributed to the creation of a

comprehensive interim Electricity Networks Sector

Growth Plan published in December 2025 by the

Energy Networks Association (ENA) and BEAMA,

the UK manufacturing trade association for the

electrotechnical sector, setting out a collaborative

roadmap to shape national growth.

–We are signatories to the Prompt Payment Code

and encourage our suppliers to adopt the

principles of this code in their own supply chains.

National Grid plc Annual Report and Accounts 2025/26	25	Strategic Report	Corporate Governance	Financial Statements	Additional Information
Our stakeholders cont.

Communities

Why our communities are important to us

We engage extensively with the communities

where we work, and with their representatives, to

understand their needs, enhance our contribution

to their wellbeing, and ensure we support them in

the most meaningful and appropriate ways.

Interests

Our communities need us to deliver energy safely

and reliably, while strengthening the positive

contributions our operations bring to their wellbeing

and offering meaningful support to the individuals

and communities who need it most.

Our engagement

–We engage extensively with local communities

as part of our major projects planning

consultations, and we use their feedback to

inform the proposals we submit for development

consent.

–During the year, Board members visited

operational sites and received updates on

community matters, including:

–strategic infrastructure projects and the RIIO-

T3 business plan submission

–a dinner with community, civic and policy

leaders in NYC to discuss policy

considerations, community needs, and how

National Grid could support positive

outcomes.

–On an ongoing basis, we develop and

implement safety programmes, and work with

first responders and communities, so that all

parties have a heightened awareness of how our

system operates and what we do to assure the

highest possible reliability and safety of the

public.

–We lead with listening and lived experience

through structured community feedback,

ensuring our approach is responsive and

informed.

Political and regulatory

–We build trust-based, inclusive partnerships with

local organisations and under-represented

groups to share ownership and strengthen long-

term outcomes.

–We use data and community insight to target

investments, improve decisions, and measure

social and business value.

Outcomes

–Our outreach programmes continue to support

economic growth and help upskill communities,

particularly in the most disadvantaged areas.

–During National Engineers Week, partners

across the US delivered hands-on Energy

Through Engineering activities, reaching more

than 1,500 students.

–In February 2026 we launched BioBus with the

Long Island Children’s Museum – a mobile lab

that will reach over 45,000 students annually.

–Consultation with communities and residents

near proposed UK infrastructure projects enables

us to shape proposals and progress projects.

–We’ve invested heavily in supporting vulnerable

customers and education programmes:

–21,000 customers supported to save £22

million via our fuel poverty programmes in UK

ED.

–5,000 people supported to save £4 million via

our Low Carbon Transition services.

–>100,000 education and STEM outreach

interactions in the UK ED region alone.

Why our regulators and political

stakeholders are important to us

We engage with regulators, governments and

other key political stakeholders to support the

regulatory and policy frameworks required to

deliver current and future energy needs. We work

closely with our regulators on rate cases in the US

and price controls in the UK.

Interests

The interests of our regulators and political

stakeholders are based around a common theme

– whether UK or US, state or federal – to protect

the interests of customers and to deliver a secure

and reliable energy future.

Our engagement

–Our Chief Executive has engaged with key

appointed and elected officials, including

Downing Street, the Federal Energy Regulatory

Commission (FERC), and key US Secretaries to

discuss energy security, infrastructure delivery

and innovation.

–Business unit executives and external affairs

leaders engage with state and local leaders, the

New York Public Service Commission, the MA

Department Public Utilities (MADPU), and

relevant agencies to inform and foster

communication so that rate cases, major

projects, and the regulatory environment are

meeting the needs of customers today and in

the future.

–Our US Federal Government Relations team

engages with Congress, the Trump

Administration, and federal agencies on

affordability, load growth, reliability, tax and

permitting.

–Members of the Board and UK executive and

working-level colleagues engaged with Ofgem

on UK ET’s RIIO-T3 business plan and the ED3

regulatory framework, and with the UK

Government on its policy agenda, including

planning, connections, resilience, supply chain

and skills.

Outcomes

In the US:

–Delivered stakeholder engagement plan in line

with the MADPU new public outreach

requirements for Gas Rate Case filing while

addressing heightened affordability concerns.

–Engaged with the MA Administration and

members of the legislature to inform the

development of energy affordability legislation

consistent with company priorities.

–Collaborated on the new State Energy Plan,

supporting our New York business unit strategy

and reinforcing the role of gas in an affordable,

achievable energy transition.

–Through joint advocacy and coalition building,

achieved the approval and permitting of the

Northeast Supply Enhancement (NESE) pipeline

to increase reliability and affordability in New York.

–Engaged with federal lawmakers on One Big

Beautiful Bill Act (OBBBA) to prevent corporate

tax policy that would negatively impact National

Grid.

In the UK:

–Supported planning reform, with the Planning and

Infrastructure Act becoming law in

December 2025. Specific to UK ED, the

Government has announced its intent to make

legislation changes following the Electricity

Infrastructure Consents, Land Access and Rights

consultation, which should speed up and reduce

costs of delivery for our customers.

–Delivered an interim Electricity Networks Sector

Growth Plan to boost jobs, supply chain

opportunities, and UK network investment.

–Supported the ongoing implementation of a new

regime for grid connections.

National Grid plc Annual Report and Accounts 2025/26	26	Strategic Report	Corporate Governance	Financial Statements	Additional Information
Our key performance indicators

We use a range of metrics to measure Group performance. In 2025/26, these metrics were aligned to our five strategic priorities.
Link to remuneration Remuneration of our Executive Directors, and our employees, is aligned to the successful delivery of our strategy. We use a number of our KPIs and alternative performance measures as specific measures in determining the Annual Performance Plan (APP) and Long-Term Performance Plan (LTPP) outcomes for employees and Executive Directors. These measures are either specifically accounted for in remuneration targets or considered as part of a review of wider business performance.
	Read more on page 107

Underlying EPS (p)	Group capital investment (£m)	Green capital expenditure (£m)
78.0p	£11,576m	£9,834m
2025/26	2025/26	2025/26
2024/25	2024/25	2024/25
2023/24	2023/24	2023/24
Link to strategy	Link to strategy	Link to strategy
Description A measure of the Group’s profitability for the year attributable to equity shareholders of the Group. It excludes exceptional items, remeasurements, timing, impact of deferred tax in UK regulated businesses (NGET and NGED) and US major deferrable storms (net of in-year allowances and deductibles) if these exceed $100 million threshold in a year. We expect underlying earnings per share CAGR to be 8-10% from the 2025/26 baseline,  aligned with our asset growth.	Description Measures our annual investment into property, plant and equipment, including capital prepayments, intangible assets and equity contributions to joint ventures and associates. Investing in our assets helps to increase our future revenue allowances. We expect to invest at least £70 billion between April 2026 and March 2031.	Description Measures the amount of capital expenditure invested in decarbonisation of energy systems and considered to be aligned with the principles of the EU Taxonomy for climate change mitigation and adaptation activities. Green capital expenditure excludes any capital prepayments and equity investments in joint ventures and associates. We expect around 85% of our £70 billion capital investment between April 2026 and March 2031 to be aligned with the principles of the EU Taxonomy legislation.
Progress in 2025/26 Underlying EPS increased by 4.7p (6%) year-on-year driven by strong performance across our regulated businesses including new rate agreements in the US, higher revenues from totex allowances driven by investments in the UK and disciplined cost efficiency across the Group. These more than offset the impact of divestments, the increased number of shares after the Rights Issue and the adverse impact of the change in FX rates.	Progress in 2025/26 We delivered a record year of capital investment driven by the ramp up of spend on Wave 1 ASTI projects in UK ET and increased electricity distribution and transmission investment in both New York and New England (including CLCPA and Smart Path Connect in New York and system capacity, asset condition and programme spend in New England). These were partially offset by lower investment in NGV following the impact of divestments.	Progress in 2025/26 Green capital expenditure increased by £2.2 billion to £9.8 billion, driven by investment in key infrastructure projects. Green alignment for capital expenditure increased to 88.5%, up from 81.1% in 2024/25, demonstrating continued progress in aligning investment with the clean energy transition. The share of green capital expenditure as a proportion of group capital investment, which includes capital prepayments and equity contributions, was 85.0%.

Financial measures

Enable the energy transition	Build the networks of the future	Deliver for customers	Operate safely and efficiently	Build tomorrow’s workforce today
Indicates an alternative performance measure

National Grid plc Annual Report and Accounts 2025/26	27	Strategic Report	Corporate Governance	Financial Statements	Additional Information
Our key performance indicators cont.

Group RoE (%)	Asset growth (%)*	Scope 1 and 2 GHG emissions (mtCO2e)	Scope 3 GHG emissions (mtCO2e)
9.8%	10.9%	7.5	29.5
2025/26	2025/26	2025/26	2025/26
2024/25	2024/25	2024/25	2024/25
2023/24	2023/24	2023/24	2023/24
Link to strategy	Link to strategy	Link to strategy	Link to strategy
Description Group RoE measures our performance in generating value for shareholders by dividing our regulated and non-regulated financial performance, after interest and tax, by our measure of equity investment in all our businesses, including our regulated businesses, NGV and other activities and joint ventures. We aim to optimise Group RoE through driving performance across our operating companies.	Description Maintaining efficient growth in our regulated and non-regulated assets ensures we are well positioned to provide consistently high levels of service to our customers and increases our future revenue allowances. This includes critical investment on network safety and resilience and to meet increased demand. We aim to achieve Group asset growth CAGR of around 10% to March 2031.	Description We are delivering new infrastructure to enable the digital, electrified economies of the future. Our biggest contribution to reducing greenhouse gas (GHG) emissions, both across society and in terms of our own emissions, is what we do to enable the transportation and distribution of clean energy in the regions where we operate. We understand the importance of partnership and are actively engaging with governments, regulators, and the energy industry to help ensure the policy and regulatory frameworks required for future investments in decarbonising the energy sector, and reducing our emissions, are in place. We will continue to work towards our ambitious climate targets.
Progress in 2025/26 Group RoE has increased by 80bps year-on-year due to increased regulated performance including new rate agreements in the US, higher revenues supported by increased allowances in the UK and disciplined cost efficiency. This is partially offset by reduced performance in our non-regulated business following the divestments and increased financing costs due to our increased capital spend.	Progress in 2025/26 Asset growth has increased by 190bps year-on-year driven by growth across our regulated businesses including ASTI investment and connections work in UK ET, CLCPA investment in New York and GSEP investment in New England.	Progress in 2025/26 Scope 1 and 2 emissions for 2025/26 were 7,511 ktCO2e, an increase of 1% from 2024/25. While this is a decrease of 3% against our 2018/19 baseline it is outside of the range set out in our Climate Transition Plan. The year-on-year increase is primarily due to increased Scope 1 emissions from our Power Generation assets in New York, which provide critical system reliability. Scope 2 emissions have decreased year-on- year, attributable to lower grid carbon intensity. Our Scope 3 emissions (excluding sold electricity) for 2025/26 as per our Science Based Targets initiative (SBTi) target were 26,833 KTCO2e, representing an 11% increase against our 2018/19 baseline. This increase is primarily due to increased capital investment in constructing new energy infrastructure. You can read more about our GHG emissions and environmental performance on pages 40 — 44. You can read more about the Task Force for Climate-related Financial Disclosure (TCFD) and our wider sustainability activities on pages 53 — 68.

Financial measures

Non-financial measures

* Normalised for the sales of NG Renewables and Grain LNG in the year.

National Grid plc Annual Report and Accounts 2025/26	28	Strategic Report	Corporate Governance	Financial Statements	Additional Information
Our key performance indicators cont.

Group lost time injury frequency rate (LTIFR) (LTIs per 100,000 hours worked)	Employee engagement index (%)
0.11	81%
2025/26	2025/26
2024/25	2024/25
2023/24	2023/24
Link to strategy	Link to strategy
Description Every day we strive to do the right thing, find a better way, and make it happen. Safety is our highest priority for our employees and the public. One of our main safety indicators is LTIFR. This is the number of worker LTIs per 100,000 hours worked in a 12-month period (including fatalities) and includes our employee and contractor population. Our aim is to achieve 0.1 or below lost time injuries per 100,000 hours worked per year.	Description Measures how engaged our employees feel, based on the percentage of favourable responses to questions repeated annually in our employee engagement survey. Our aim is for our employee engagement metrics to remain at or above the high- performing norm.
Progress in 2025/26 Safety is an important factor within decision making, therefore tied to our Executive Directors’ remuneration, reflecting the expectation that safety is an integral part of how we work at National Grid. Our LTIFR stood at 0.11, compared with 0.10 in 2024/25 and against our Group target of 0.10. We are disappointed in this result and in response, we have implemented targeted Group and business unit initiatives to strengthen risk awareness, leadership engagement and control effectiveness.  You can read more about our LTIFR performance in the Responsible Business section (pages 38 — 52).	Progress in 2025/26 We run an employee engagement survey, Grid:Voice, twice-yearly, to understand and act on colleague feedback. This allows us to build a culture that is purpose-led and results-driven, with a great colleague experience. As a result, we experience high engagement and strong advocacy, above external benchmarks. This year, 26,000 employees completed the survey, which resulted in the highest response rate in six years. Engagement scores remain strong and leadership will continue to monitor to increase by 1% in line with the high-performing norm.

Non-financial measures

Network reliability and interconnector availability
99.9%	90%
2025/26	2025/26
2024/25	2024/25
2023/24	2023/24
Network reliability %	2025/26	2024/25	2023/24
UK ET	99.99999	99.99983	99.999998
UK ED	99.98795	99.98294	99.99261
NE ET	99.96594	99.98544	99.97549
NY ET	99.92740	99.84345	99.97168
NE ED	99.96434	99.97724	99.94327
NY ED	99.95060	99.94077	99.92823
Interconnector availability %
IFA interconnector	74.81	79.42	82.01
IFA2 interconnector	87.55	74.87	71.19
BritNed interconnector	99.97	75.60	98.00
Viking interconnector	95.96	91.75	N/A
NSL interconnector	95.22	94.96	95.87
Nemo Link interconnector	98.72	98.75	96.80
Link to strategy
Description Delivering network reliability is critical to our licence to operate. We achieve this through disciplined capital investment aligned to demand and supply risks, robust network design and construction, targeted maintenance and asset replacement, and well‑tested incident response plans. Reliability is measured separately across each business area.
Progress in 2025/26 We continued our track record of delivering consistent network reliability for our customers, demonstrating our continued investment in asset health and resilience. Overall Group network reliability was 99.9%, consistent with both 2024/25 and 2023/24. Interconnector availability improved by 4% year- on-year, closing at 90%, the maximum available for the year. This was driven by improved availability for both IFA2 and BritNed, driven by decreased unplanned outages.

National Grid plc Annual Report and Accounts 2025/26	29	Strategic Report	Corporate Governance	Financial Statements	Additional Information
Our key performance indicators cont.

Customer satisfaction
	2025/26	2024/25	2023/24	Target
UK ET (/10)1	7.0	6.5	7.2	7.7
UK ED (/10)1	9.01	8.98	8.97	9.12
NE – (%)2	72.2	53.9	57.5	67.33 3
NY – (%)2	72.8	61.1	64.5	73.23 3
Link to strategy
Description We measure customer and stakeholder satisfaction, while also maintaining engagement with these groups and improving service levels.
Progress in 2025/26 In UK ET, we follow the Quality of Connections Incentive and our score demonstrates a positive shift compared to last financial year, marked by significant industry reform and rapid change. We have strengthened and developed our workforce, invested in digital transformation capabilities and upheld customer-centric principles in a dynamic and unpredictable environment. NESO initiated reforms to the existing connections queue that will aim to help UK ET deliver faster, fairer and more strategic grid connections for existing and future customers. In UK ED, we continue to deliver year-on-year improvements as we strive to achieve our target with several connection initiatives driving benefits for customers during the year. In the US, satisfaction levels improved over the course of the year, reflecting continued progress in how we serve and support our customers. At the same time, colder weather and increased energy use contributed to higher bills, creating affordability pressures. Read more about our customer satisfaction scores in the Responsible Business review on pages 38 — 52.

Non-financial measures

1.The UK ET and UK ED scores are included as part of the regulatory framework.

2.Customer trust metrics are based on survey questions that differ year‑on‑year, with the current year reflecting overall experience and the

prior years focusing on trust of advice provided. The current year score is a weighted average from four survey inputs that run

continuously across both residential and commercial customers throughout the year. Please see our reporting methodology on the

Responsibility section of our website for details.

3.2025/26 New York and New England targets for the newly introduced Customer Satisfaction metric.

National Grid plc Annual Report and Accounts 2025/26	30	Strategic Report	Corporate Governance	Financial Statements	Additional Information
Internal control and risk management

The Board is committed to effective risk management to

deliver our strategy, protect our people, reputation

and assets, and safeguard the interests of our stakeholders.

Our Enterprise Risk Management (ERM) Framework

National Grid is exposed to a variety of uncertainties (threats and opportunities) that could have a

material effect on the Group’s financial position, our operations, our reputation and stakeholder

interests; represented by our Group Principal Risks. These uncertainties are managed through our

ERM Framework and system of internal control. We maintain and monitor the application of the

Framework throughout the year and formally assess its effectiveness annually. This ongoing

oversight, alongside continuous improvement, enables us to respond effectively to changes in the

internal and external environment and to inform our Group Principal Risks and related risk

management activities.

Our risk management and internal control activities are delivered via a “Three Lines” model:

Risk, Controls and Assurance Governance:
–Identify and monitor the Group Principal Risks and emerging risks across the Group
First Line: Business units	Second Line: Risk and Compliance functions
–Identify and assess risks –Manage day-to-day operational risks –Apply risk appetite, delegated authorities, policies, procedures and codes of conduct –Design and operate internal controls and other mitigation measures –Monitor and report risks through relevant reporting and escalation processes	–Risk and compliance oversight –Design and/or enable risk management processes across the Group and responsible for continuous improvement –Provide risk expertise, advice and support –Monitor and assure compliance with policies, standards and the ERM process –Report to the Board and Group Executive
Third Line: Internal Audit
–Internal audit (supported by outsourcing or co-sourcing with external assurance providers) –Review and evaluate risk management activity and provide assurance over the effectiveness of the control environment –Report to the Board and the Group Executive

Governance and oversight

The Board is accountable for the Group’s system of risk management and internal control, including the

amount of risk the Group is prepared to accept in delivering our strategic priorities (our risk appetite).

The Group Principal Risks are monitored throughout the year. Each Group Principal Risk is also subject to

a detailed review annually by the Group Ethics, Risk and Compliance Committee and the relevant Board

committees. A consolidated summary of the Group Principal Risks and how they are being managed is

then reviewed bi-annually by the Audit & Risk Committee. Reporting includes consideration of changes in

the internal and external context, a review of the effectiveness of mitigations and internal controls, and an

assessment of whether risks are being managed within risk appetite, together with any additional

actions required.

National Grid plc Annual Report and Accounts 2025/26	31	Strategic Report	Corporate Governance	Financial Statements	Additional Information
Our Group Principal Risks

Business context

The external context in which we operate has changed significantly in recent years, particularly in relation to the political

and regulatory environment, technological developments, affordability considerations, and how we deliver for customers.

We adapt our business and risk management activities and mitigations accordingly.

Group Principal Risks

Operational risks arise from our core business practices, which rely on our systems, equipment, processes and people. –Catastrophic security incident –Significant safety or environmental event –Loss of supply* –Major capital projects Strategic risks, both internal and external, are associated with the business model, corporate strategy and long-term planning. –Satisfactory regulatory outcomes –Climate change mitigation –Political and societal expectations –People capability and capacity Financial risks are risks associated with National Grid’s ability to raise capital, maintain access to capital, and deliver profitable growth. –Financing our business Compliance risks relate to compliance with laws and regulations, industry standards, contract requirements and internal policy. –Legal and regulatory compliance frameworks operate at a jurisdictional level (i.e. UK, US federal, New York and Massachusetts) and therefore apply across all relevant National Grid businesses rather than being amalgamated at Group.

Strategic Group Principal Risks

Operational Group Principal Risks

Financial Group Principal Risks

Compliance Group Principal Risks

*Significant disruption of energy was renamed to Loss of supply during 2025/26 to better reflect the nature of the risk. Upstream supply considerations are included as a key cause.

A summary of actions taken by management to manage our Group Principal Risks is provided on pages 32 — 36. The Board reviewed these risks as part of the bi-annual

Group Principal Risk review, which incorporates feedback and recommendations from relevant Board Committees. Further information can be found on pages 100 — 104.

Strategic priorities					Risk trend
Enable the energy transition	Build the networks of the future now	Deliver for customers	Operate safely and efficiently	Build tomorrow’s workforce today	Increasing	Decreasing	No change

National Grid plc Annual Report and Accounts 2025/26	32	Strategic Report	Corporate Governance	Financial Statements	Additional Information
Our Group Principal Risks cont.

Operational Group Principal Risks

Catastrophic security incident
	Oversight: Board and Audit & Risk Committee

Description

There is a risk that we are unable to adequately anticipate and

manage disruptive forces on our critical systems, facilities and

personnel, because of cyber attacks, physical attacks, malicious

internal or external actors, or inadequate recovery capabilities,

resulting in disruption of business operations, tampering or abuse of

assets, safety hazards, or loss of confidentiality, integrity, and/or

availability of systems and data.

Developments during 2025/26

The Board recognises that the risk of a catastrophic security

incident is being driven by an increasingly hostile and complex

threat environment, with potential for severe operational, financial,

and reputational consequences for critical national infrastructure

providers. Against these drivers, the Board’s focus is on whether

the Group has robust, layered defences and recovery capability to

prevent, detect and respond to catastrophic security events.

Actions taken by management

Management actions are focused on preparedness and rapid

recovery, recognising that the threat landscape is constantly

evolving. These actions include:

–Expansion of the risk to incorporate physical security incidents,

recognising the hybrid nature of threat, and reducing visibility

gaps to physical security controls and management.

–Employing technical, administrative, and physical/cyber security

controls for both IT and operational technology aligned to the

National Institute of Standards, and Technology Cybersecurity

Framework (NIST CSF) v2.0, as well as all applicable laws and

regulations.

–We consistently verify and validate our risk management through

internal and external audits and risk assessments, penetration

tests, adversary simulation, incident response exercises,

compromise assessments, continuous control measurements

and other assessment methods.

Significant safety or environmental event
	Oversight: Safety & Operations Committee

Description

There is a risk of a significant safety or environmental event because

of network asset failures or operability issues, extreme weather,

third-party damage or security attacks, resulting in a major public or

employee safety impact, or environmental damage.

Developments during 2025/26

The Board recognises that the risk of a significant safety or

environmental event is influenced by a combination of asset-related

factors, operating environment pressures, and heightened

stakeholder expectations. The Board’s focus is on whether the

Group has robust, consistently applied controls and culture to

prevent serious safety or environmental incidents, and to respond

effectively if they occur. National Grid takes a holistic approach

focusing on proactive preventative measures including inspection

and maintenance of assets as well as appropriate recovery and

response procedures.

Actions taken by management

Management actions are focused on prevention, preparedness,

and continuous improvement, recognising that the consequences

of a significant safety or environmental event could be severe,

including:

–Reduction in risk exposure following the sale of Grain LNG.

–Updates to Group-wide Process Safety Business Management

System to further strengthen prevention of process safety events

through tighter control of safety-critical maintenance.

–Delivering proactive inspection, maintenance and integrity

management programmes to reduce the likelihood of asset

failures that could lead to safety or environmental harm.

–Maintaining and testing emergency response arrangements to

ensure rapid, coordinated action to protect people, communities,

and the environment if an incident occurs.

–Using incident investigations, near miss reporting, assurance

activity, and leadership engagement to embed learning and

reinforce a strong safety and environmental culture across the

organisation.

–Responding to new regulatory requirements in the US which

provide opportunities to strengthen process safety management.

–Although primarily related to the Loss of supply Group Principal

Risk, the proposed New York Northeast Supply Enhancement

(NESE) pipeline project would not only mitigate some gas supply

constraints, it could also reduce the potential risks relating to

major hazard assets that are caused by extensive manual

relighting efforts when service disruptions occur, and will reduce

the number of Compressed Natural Gas (CNG) sites required in

Downstate New York.

National Grid plc Annual Report and Accounts 2025/26	33	Strategic Report	Corporate Governance	Financial Statements	Additional Information
Our Group Principal Risks cont.

Operational Group Principal Risks

Loss of supply
	Oversight: Safety & Operations Committee

Description

There is a risk of a loss of supply event because of network asset

failures or operability issues, upstream supply issues, extreme

weather, third-party damage or security attacks, resulting in

disruption of energy to our customers.

Developments during 2025/26

Increasing system complexities, system demand and network

stress, coupled with legacy assets, are of key focus to ensure the

Group continues to concentrate on proactive prevention and

efficient recovery from loss of supply events to reduce the risk of

significant disruption of energy to our customers. The UK

Government’s new Energy Resilience Strategy and associated

taskforce will provide enhanced sector‑wide coordination, and new

regulatory requirements in the US have created further opportunities

to strengthen asset management and resilience practices.

In response to the North Hyde substation fire in March 2025, we

have undertaken extensive, multi-stakeholder engagement to

understand the root causes, including comprehensive internal and

independent investigations and close collaboration with regulators,

government bodies and industry partners to ensure all lessons are

identified and issues addressed.

Actions taken by management

Management actions are focused on reducing the likelihood of

supply interruptions and minimising customer impact when events

occur, including:

–Acceptance of Ofgem’s RIIO-T3 final determinations which

recognise the need for significant investment in the electricity

transmission sector to continue to deliver world-leading reliability

while nearly doubling the amount of power we can transfer

around the country.

–Reduction in risk exposure following the sale of Grain LNG.

–Alleviated supply conditions are expected with the proposed

New York NESE pipeline project.

–Preparing our UK ED3 submission to Ofgem which will seek to

evidence the need for greater investment in climate resilience.

–Updating our risk assessments to incorporate upstream supply

failure scenarios.

–Continued collaboration with energy suppliers, regulators, and

government departments to explore industry wide mitigation

strategies aimed at maximising supply, managing demand and

enhancing storage.

–Gas main replacement programmes and a storm-hardening

programme, along with main outage planning to ensure swift

response and recovery.

–Reviewing and updating Group-wide assessments of climate

vulnerabilities and monitoring progress against multi-decade

climate adaptation plans, complemented by existing resilience

investments to ensure long-term preparedness.

–Further development of emergency response plans covering

wildfire and cyber scenarios, along with asset risk assessment

and integrity management plans.

–We continue to monitor wildfire risk and have engaged a third

party to carry out specialist wildfire risk assessments.

–Ongoing flood contingency plans and robust preparedness for

winter and summer, including scenario planning, and testing

response plans with proactive communication strategies.

–Acceleration of proactive maintenance and asset checks ahead

of winter to maximise network availability, with an emphasis on

system reliability assets, sub-sea cable monitoring and ongoing

year-round maintenance.

Major capital projects
	Oversight: Safety & Operations Committee

Description

There is a risk that we are unable to deliver on our major capital

project programme within the required timeframes because of

misalignment or lack of clarity with regulatory expectations, unclear

financial frameworks to incentivise investment, complex planning

requirements, external impacts on supply chain, or a failure to

demonstrate clear, long-term economic benefits to communities,

leading to increased costs, compromised quality, reputational

damage and detrimentally impacting our ability to deliver our clean

energy transition strategy.

Developments during 2025/26

Delivery of the Group’s major capital projects remains a central

strategic priority, with the scale of our cumulative capital investment

reaching at least £70bn over the next five years to modernise

energy networks, support growing demand, and enable the energy

transition. The focus on execution is being shaped by numerous

external developments such as supply chain constraints, and

regulatory complexities which influence project cost, schedule,

planning, and stakeholder expectations.

Actions taken by management

Management actions are focused on strengthening delivery

discipline and resilience, including:

–implementing more consistent, Group-wide frameworks, to clarify

decision gates, strengthen and schedule controls and improve

transparency over delivery performance;

–enacting earlier engagement strategies with regulators, planning

authorities, and communities to reduce late stage changes or

delays; and

–strengthening procurement strategies, supplier relationships, and

commercial disciplines to mitigate supply chain risk. We are also

actively monitoring the current geopolitical landscape and

considering impact on our risks, including Catastrophic security

incident and Loss of supply in particular.

National Grid plc Annual Report and Accounts 2025/26	34	Strategic Report	Corporate Governance	Financial Statements	Additional Information
Our Group Principal Risks cont.

Strategic Group Principal Risks

Strategic priorities
Enable the energy transition	Build the networks of the future now	Deliver for customers
Operate safely and efficiently	Build tomorrow’s workforce today
Risk trend
Increasing	Decreasing	No change

Satisfactory regulatory outcomes
	Oversight: Responsible Business Committee

Description

There is a risk that we fail to influence future energy policies and

secure satisfactory regulatory agreements because of lack of insight

or unsuccessful negotiations given the scale of investment needed

to meet load growth and clean energy requirements, while

balancing affordability and reliable concerns. This will lead to poor

regulatory outcomes, energy policies that negatively impact our

operations, reduced financial performance, fines/penalties,

increased costs to remain compliant and/or reputational damage.

Developments during 2025/26

The scale of change required to enable the energy transition is

unprecedented, driving our focus on whether the Group has the

insight, engagement, and capability to secure satisfactory regulatory

outcomes. Specifically ensuring the Group is proactively shaping

price controls and rate case filings with clear positions and

engagement/advocacy to support economic growth, affordability,

reliability and a cleaner energy system. Affordability remains a

prominent theme, influencing public sentiment and regulatory

scrutiny. Customers are seeking to understand what steps utilities

are taking to manage costs that end up on customer bills. The

impact on customers has always been a concern in utility

infrastructure planning and the costs on the bill beyond delivery

service are growing, leaving less room for necessary grid

investment.

Actions taken by management

Management actions are focused on proactive engagement, robust

regulatory frameworks and disciplined delivery, specifically including

the following:

–Ensuring well-evidenced submissions that clearly articulate

investment need, customer impact, and long-term value, with a

focus on achieving fair and sustainable outcomes.

–Demonstrating cost discipline, delivery efficiency, and value for

customers, including consideration of incentives, reopeners, and

performance mechanisms within regulatory frameworks.

–Continuously monitoring regulatory developments, decisions and

emerging risks across jurisdictions to inform strategy with

escalation where necessary.

–We have accepted the RIIO-T3 price control, achieving a

satisfactory outcome. We are now focused on delivering against

our commitments with continued focus on capital delivery

efficiency and responding to the highly incentivising framework

that aligns outperformance with outcomes customers value (for

example, faster connections and reduced constraint costs).

–We are actively engaging on the ED3 price control (price control

2028-33), focusing on well-evidenced submissions that balance

investment requirements with delivering value for customers and

affordability.

–We are focusing on core regulatory principles in ongoing gas

base rate cases and engaging constructively with regulators to

support balanced and sustainable outcomes, having successfully

agreed our 2025/26 US rate cases.

–We are participating in affordability and rate design dockets in the

US to educate on the regulatory compact.

–Our interconnector structures continue to deliver net benefits to

customers, including supporting system efficiency and enabling

funding for energy assistance programmes.

National Grid plc Annual Report and Accounts 2025/26	35	Strategic Report	Corporate Governance	Financial Statements	Additional Information
Our Group Principal Risks cont.

–

Strategic Group Principal Risks

Climate change mitigation
	Oversight: Responsible Business Committee

Description

There is a risk that we fail to identify and/or deliver upon the

actions necessary to meet our climate change targets and enable

the wider energy transition because of poor monitoring and

response to external developments associated with mitigating

climate change, leading to legal risks or reputational impacts of

not meeting our climate change targets and, in the longer term,

reaching net zero by 2050.

Developments during 2025/26

Achieving climate change targets remains a central long-term

objective. The strategic focus on delivery is increasingly shaped by

external developments that influence the pace, cost, and feasibility

of the energy transition. These developments continue to evolve

across policy, markets, technology and stakeholder expectations,

and are actively monitored as part of the Group’s risk and strategic

planning processes. Against these drivers, the Board’s focus is on

whether the Group has appropriate governance, controls and

flexibility to manage climate change targets within appetite.

Actions taken by management

Management actions are focused on credible target management,

governance and transparency, recognising the importance of

adapting to a changing external environment. These actions include:

–implementing a revised US operating model with sustainability

teams embedded within business units, and integrating

Environment, Social, Governance and Risk teams to strengthen

oversight and coordination;

–undertaking an internal review of the Group’s climate targets and

maintaining current targets while keeping alternative pathways

under active consideration, reflecting evolving external

dependencies;

–updating greenhouse gas emissions analysis to reflect changes

in policy, regulation and market conditions, and using peer

benchmarking to inform ongoing risk assessment; and

–improving our sustainability narrative to better reflect our wider

societal contribution to emissions reduction.

Political and societal expectations
	Oversight: Responsible Business Committee

Description

There is a risk that we do not position ourselves appropriately to

navigate political and societal expectations because of a failure to

proactively monitor the landscape or anticipate and respond to

changes, leading to political intervention, an inability to meet our

core energy objectives, uncovered costs or pressure on returns or

the inability to gain necessary regulatory approvals.

Developments during 2025/26

The Board recognises that the risk associated with political and

societal expectations arises from a rapidly evolving external

environment, where energy affordability, climate policy and public

trust are increasingly intertwined with political decision making.

Against these drivers, the Board’s focus is on whether the Group is

appropriately positioned to navigate political and societal

expectations, while continuing to deliver its strategic priorities.

Actions taken by management

Management actions are focused on anticipation, engagement and

alignment with policymakers, recognising that many external drivers

are outside the Group’s direct control:

–Implementing a more regionally focused external affairs operating

model to improve engagement with governments, regulators,

communities and other stakeholders in key markets.

–Monitoring political, regulatory, media and societal trends across

jurisdictions to identify emerging issues early and inform decision

making.

–Defining policy priorities aligned to the Group’s strategic

objectives and engaging constructively with policymakers to

support stable, investable regulatory frameworks.

–Conducting scenario analyses to ensure the Group can adapt its

response to changes in the external environment.

People capability and capacity
	Oversight: People & Remuneration Committee

Description

There is a risk that we do not have, across our workforce and within

our leadership, the capability or capacity necessary to deliver on

existing or future commitments because of ineffective planning for

future people needs, insufficient development of people, and failure

to attract and retain people in a competitive market for skills and

talent, leading to failure to deliver on our business goals, strategic

priorities and mission.

Developments during 2025/26

We continue to focus on future workforce needs, recognising that

the ability to deliver the Group’s strategic priorities, including the

energy transition and major capital projects, is fundamentally

dependent on having sufficient workforce capacity, capability and

leadership depth, now and in the future.

Actions taken by management

Management actions are focused on building resilience, flexibility,

and future ready capability, while balancing near-term delivery

needs with longer-term workforce sustainability. These actions

include:

–maintaining a consistent, forward looking, Group-wide approach

to strategic workforce planning to have visibility on future

capacity and capability requirements;

–expanding our early careers programmes to build sustainable

talent pipelines for critical roles and support diversity of talent

pools; and

–monitoring recruitment and retention metrics closely to ensure

capacity is stable and delivery risk is reduced.

National Grid plc Annual Report and Accounts 2025/26	36	Strategic Report	Corporate Governance	Financial Statements	Additional Information
Our Group Principal Risks cont.

Financial Group Principal Risks

Strategic priorities
Enable the energy transition	Build the networks of the future now	Deliver for customers
Operate safely and efficiently	Build tomorrow’s workforce today
Risk trend
Increasing	Decreasing	No change

Financing our business
	Oversight: Audit & Risk Committee

Description

There is a risk that we are unable to fund our business efficiently as

a result of lack of access to a wide pool of equity and debt

investors, market volatility, unsatisfactory regulatory outcomes or

unsatisfactory financial or operational performance of the business,

leading to a lack of access to capital, impacting our ability to

achieve our strategic objectives, including our proposed capital

investment programme.

Developments during 2025/26

The Board recognises that the ability to finance the Group’s

strategy is increasingly influenced by a combination of

macroeconomic conditions, capital market dynamics, and

regulatory outcomes, alongside the scale and duration of the

investment programme. The Group is undertaking a multi-year

investment programme of unprecedented scale to modernise

networks, meet rising demand and enable the energy transition.

The duration and magnitude of this investment mean that continued

access to debt and equity markets on acceptable terms is

essential. The Board considers the long-term nature of these

funding needs to be a key structural driver of financing risk.

Actions taken by management

Management actions are focused on maintaining financial resilience,

flexibility and market access, recognising that many financing

drivers are external and cyclical. Key actions and developments

include:

–We have agreed an updated five-year financial framework to

2030/31, including cumulative capital investment of at least

£70bn over the next five years.

–Delivered positive regulatory outcomes, including approval of

NIMO Niagara Mohawk (National Grid’s electric and gas

distribution business in Upstate New York) rate agreement joint

proposal and acceptance of the RIIO-T3 final determinations.

–Ensured maintenance of appropriate headroom against key

credit metrics, supporting confidence in the Group’s ability to

access debt capital markets.

–Maintained strong engagement with current and potential

investors through both the Group’s equity and debt investor

relations programmes.

–Maintaining strong liquidity, a robust credit rating and access to a

diversified range of funding sources to raise debt efficiency to

fund our investment programme.

–Completion of portfolio actions, including the disposals of

National Grid Renewables and Grain LNG in 2025/26, with

proceeds retained for reinvestment in the regulated business.

–Frequent engagement with credit rating agencies, with no

changes to credit ratings or outlooks expected.

National Grid plc Annual Report and Accounts 2025/26	37	Strategic Report	Corporate Governance	Financial Statements	Additional Information
Cyber security and emerging risks

Cyber security risk management and strategy

Cyber security risk is overseen and continuously monitored by the

Group Executive and the Board. We apply the NIST cyber security

framework to identify, assess, monitor and respond to cyber security

risks, supported by a risk management process aligned to the

Group’s ERM Framework and covering all IT and operational

technology assets including systems and data, legacy technology risk

and those operated by third parties. Our cyber security risks are

managed via the “Three Lines” model, supplemented by external

specialist support including cyber security firms, providing

independent validation of our approach and specialist expertise for

specific regulatory requirements and technologies. Further assurance

is obtained through risk assessments, penetration testing, adversary

simulation, incident response exercises and compromise

assessments. An independent Supply Chain Risk Management

(SCRM) function identifies and oversees cyber risks arising from

third‑party service providers, with controls implemented by SCRM

that are proportionate to the supplier’s access to Group systems and

the sensitivity of data processed.

There have been no cyber security incidents to date that have

materially impacted the Group’s business strategy, results of

operations or financial condition. Notwithstanding this, we recognise

that the cyber threat environment for critical infrastructure providers

remains highly challenging and dynamic. We recognise that digital

transformation blurs the boundary between physical and cyber

security. Modern hybrid threats can combine common cyber attacks

with physical dimensions such as intrusion or sabotage. We have

emphasised a converged model that strengthens our ability to detect,

prevent and respond to these complex, multi-vector threats,

providing a more robust and resilient security framework.

Cyber security governance

The Board is responsible for oversight of cyber security. The Audit &

Risk Committee regularly reviews reporting on our approach to cyber

security risk management and developments throughout the year.

National Grid’s Chief Information and Digital Officer (CIDO) and Chief

Information Security Officer (CISO) regularly attend the Audit & Risk

Committee and hold additional briefings to the Board at least once

per year. The Audit & Risk Committee and Board work collaboratively

to ensure oversight with the proper focus of each respective

Board committee.

Cyber risk reporting includes, among other things, current and

emerging cyber security threats to National Grid and relevant sectors,

the status of key risk indicators and controls, the results of any

relevant internal or external assessments, key incidents escalated to

management during the prior and current reporting period and the

status of cyber security improvement programmes. At the executive

and management level, the CIDO is the owner of the cyber security

risk and the CISO has primary responsibility for the development,

operation and maintenance of National Grid’s cyber security

programme. Under the CISO’s oversight, National Grid’s cyber

security team implements and provides governance and functional

oversight for cyber security services, controls and processes.

In line with our ERM Framework, cyber security processes include the

escalation of material risks and incidents, including those that

originate or occur from third parties, through the organisation to the

Group Executive Committee, Audit & Risk Committee and Board as

appropriate, based on an assessment of likelihood and severity

of impact.

Emerging risks

We consider emerging risks and trends

throughout the year to assess potential future

material impacts on our risk profile. Each risk is

assigned an appropriate owner or subject matter

expert, who monitors developments and is

responsible for implementing relevant mitigations

as necessary. Emerging risk reviews are reported

at least bi-annually to the Group Ethics, Risk &

Compliance Committee, the Audit & Risk

Committee, and the Board, for review and input.

Our top three emerging risks at the date of this report are:

Emerging risk	Impact on strategy	Velocity
		Immediate < 3 years	Short term 3–5 years*	Medium term 5–10 years
Geopolitical tensions (business or supply chain disruption)
Artificial intelligence (strategic opportunities or disruption)
Affordability (customer affordability issues)

* We continuously monitor our short-term emerging risks to ensure we respond to changes in our risk assessments appropriately.

National Grid plc Annual Report and Accounts 2025/26	38	Strategic Report	Corporate Governance	Financial Statements	Additional Information
Responsible Business review

Delivering our Responsible

Business Charter

Our Responsible Business Pillars and UN Sustainable Development Goals where we have the most material impact:

We aim to act as a responsible business and play our part in

delivering an affordable, secure and clean energy system. Our

Responsible Business Charter (RBC) details our approach to being

a responsible business and the commitments we have made. It

focuses on three core pillars: Our environment, Our customers and

communities, and Our people, supported by our Responsible

Business Fundamentals.

Further details on our Responsible Business activities and metrics

can be found on our website. See links below.

Our environment			Our customers and communities			Our people
By building out the network of the future, we are continuing to connect low-carbon generation and storage and use our networks to support the electrification of heat and transport. We are also working hard to manage the impact of energy infrastructure on the natural environment.			As we help to build out the network of the future, we aim to create social value for our customers and communities. We work to support economic growth in the communities we serve, support affordability as a key part of the energy transition, and engage in volunteering and community skills development.			We are focused on providing development opportunities to all our colleagues, creating an inclusive culture, and enhancing the health and wellbeing of our employees.
2025/26 progress		Looking forward	2025/26 progress		Looking forward	2025/26 progress		Looking forward
–Replaced 315 miles of leak prone pipe –Reduced SF6 emissions by 43% through leak repairs and investing in alternatives		–Continuing to connect low- carbon generation to our networks –Collaborating with suppliers to reduce their own emissions	–Assisted over 20,000 households through our UK Grid for Good Energy Affordability Fund –Exceeded our Skills Development		–Continuing to listen to and address customer feedback –Expanding new and existing community partnerships	–81% Group-wide employee engagement score –A Glassdoor 2026 Best Place to Work		–Expanding recruitment and development programmes –Continuing to promote healthy practices and wellbeing resources
	Read more on page 40			Read more on page 45			Read more on page 47

Our Responsible Business Fundamentals
At National Grid, it is a priority to run our business and engage with our supply chains in a responsible way. Our Fundamentals include governance and activities that are essential to day-to-day business.	2025/26 progress –Transitioned supply chain sustainability risk assessments and data to EcoVadis to support supplier assessments –Invested in new innovations, such as AI demand response in data centres and enhanced pipeline imaging	Looking forward –Continuing to improve our safety programme with insights from our new reporting system –Increasing our workforce AI and data capabilities –Further embedding sustainability into supplier sourcing	To view our Responsible Business data tables, scan or click the QR code	To explore our Responsible Business website, scan or click the QR code	To read more about our Responsible Business Charter, scan or click the QR code

Read more on page 49

All 2025/26 Responsible Business metrics can be found in the Responsible Business data tables on our website.

National Grid plc Annual Report and Accounts 2025/26	39	Strategic Report	Corporate Governance	Financial Statements	Additional Information
Responsible Business review cont.

Our progress in 2025/26

Responsible business is important to us and our

stakeholders. Over the past year, we have

navigated a complex landscape characterised by

significant economic and political uncertainty. In

this environment, energy security and affordability

remain priorities. Part of being a responsible

business is taking account of, and responding to,

these expectations to deliver for our customers,

communities, colleagues and other stakeholders.

While clean power retains support from the UK

Government, energy costs remain a significant

challenge and energy resilience has emerged as a

key issue. In the US, both New York and

Massachusetts have acknowledged affordability

concerns related to the energy transition.

We, alongside other network companies, have a

unique role to play in supporting the energy system

transition. While we remain focused on reducing

our own carbon emissions, by building out the

network of the future, we are supporting

the deployment of renewable energy supply to meet

society’s growing electricity needs and bringing

down overall emissions. We are also innovating

through new technologies and approaches to

maximise the pace and scale of system-wide

decarbonisation. We are therefore looking beyond

our own emissions at the emissions reductions we

influence through our delivered and future

business activities.

In 2025/26, we connected 1,125 MW of energised

renewable generation to our transmission and

distribution networks and saw further uptake of

heat pumps and electric vehicles across our

jurisdictions. We expect these new assets to

deliver emissions savings year-on-year and

estimate they will help avoid 5 MtCO2e from

2026/27 to 2030/31 as renewable electricity

generation replaces carbon intensive generation,

heat pumps replace gas and oil boilers, and EVs

replace internal combustion engines1.

Looking forward, a significant uptick in National

Grid activity, underpinned by at least £70 billion of

capital investment in the next five years, will deliver

infrastructure that is expected to support reliable,

cleaner and affordable energy. We expect to

support further avoided emissions through our

continued role in connecting renewable generation

and facilitating the uptake of heat pumps and

electric vehicles in our jurisdictions.

We also have a wider enabling role in the energy

transition. Our infrastructure helps deliver clean

power generated by assets connected to other

networks, to both existing and new sources of

demand served by our network or in other

locations. For example, in the UK we are delivering

transmission projects to increase power flows

between Scotland and England and developing

new links to mainland Europe, better connecting

clean power to demand. In the residential,

commercial and industrial sectors, electrification

can be a key driver of emissions reductions,

including through fuel switching to electricity

supplied through our networks for heating and

transport. In collaboration with others, we therefore

expect our infrastructure to enable significant

emissions reductions across a range of sectors.

A range of activities will contribute, including:

–our Great Grid Upgrade, the largest overhaul of

the UK electricity grid in generations;

–the Upstate Upgrade, a collection of complex,

multi-year high-value transmission line projects in

support of New York’s Climate Leadership and

Community Protection Act; and

–innovation through regulatory funded projects,

working with our supply chain partners and

through our venture capital arm National Grid

Partners.

Our Scope 1 and 2 emissions are down 3% vs our

2018/19 baseline. This is outside of the range set

out in our second Climate Transition Plan (CTP),

published in May 2024. We stated in our CTP that

progress is unlikely to be linear. Scope 2 emissions

were lower than last year, but Scope 1 emissions

were higher than expected due to increased

generation from our Long Island facilities that burn

oil and gas. These units are crucial to reliability and

are contracted to the Long Island Power Authority

(LIPA), which controls when and how much they

run to maintain reliable energy supply in the region.

Our Scope 3 emissions increased by 11% in

2025/26, primarily due to an increase in supply

chain emissions, as anticipated in our CTP, as we

build out new infrastructure. We continue to identify

opportunities to reduce supply chain emissions

and aim to decouple spend growth from

emissions growth.

Affordability continues to be a concern for

households and businesses. In the US, we’ve

continued to raise awareness of financial

assistance and support available and, in the UK,

we’ve seen reforms to the connection queue that

will help us to prioritise connection-ready low-

carbon generation projects to expand availability

and maximise capacity.

We also support our local communities through

volunteering and skills development programmes.

We maintain partnerships with charities, non profits

and educators to create skills and employability

pathways for everyone in our communities and to

provide opportunities for colleagues to volunteer.

We are committed to creating a work environment

where people are treated fairly and where everyone

feels respected, valued, and empowered to reach

their full potential. For our colleagues, safety

remains our top priority as project work is scaled

up to meet our commitments, and we have a range

of initiatives underway in our business units to

ensure we meet our safety targets.

The following sections highlight the progress made

in the last year against our RBC and where there is

more to do. Working with our stakeholders, we will

continue to make progress on all of our

commitments.

1.Avoided emissions represent the difference between baseline

(counterfactual) emissions and emissions after the

implementation of the low-carbon alternative. We have estimated

cumulative avoided emissions to 2030/2031 from low-carbon

solutions delivered in 2025/26, specifically 1) Renewable

electricity connections (direct connections to our transmission

and distribution networks) 2) Electric heat pumps replacing fossil-

fuel boilers (in our distribution/customer regions) and 3) Electric

vehicles replacing internal combustion engine vehicles (in our

distribution/customer regions). Renewable electricity connections

are sourced from our Responsible Business data tables. Heat

pump and electric vehicle data is sourced at the NY, MA and UK

level on a calendar year basis, and National Grid’s share is

estimated by using NGED’s share of electricity distribution

network customers in the UK and our delivered electricity load in

our US jurisdictions. Grid carbon intensity and marginal plant

intensity are calculated on a calendar year basis.

National Grid plc Annual Report and Accounts 2025/26	40	Strategic Report	Corporate Governance	Financial Statements	Additional Information
Responsible Business review cont. Our environment

We have always viewed our targets as ambitious.

Achieving them relies on a combination of actions

we take ourselves, as well as technological

dependencies, policy and regulatory frameworks in

the regions we operate, and actions by others

including businesses and energy consumers. Our

ability to achieve our climate targets is driven by

the policies put in place by the jurisdictions where

we operate that support decarbonising their energy

systems at a rapid pace. Political and economic

headwinds have intensified in the past year.

Governments face multiple pressures, including

budget constraints and customer affordability

concerns, which may impact the pace of

Our environment

By building out the network of the future, we enable the

deployment of low-carbon energy supply and support the

electrification of heat and transport. We are also working

hard to manage the impact of energy infrastructure on the

natural environment.

Our second Climate Transition Plan (CTP), published in May 2024, outlines our

roadmap to achieve net zero by 2050. As part of this, we have set near-term science-

based GHG emissions reduction targets at a Group level. These have been approved

by the Science-Based Targets initiative (SBTi) as aligned with limiting global warming

to a 1.5°C pathway and the ambition of the Paris Agreement, and have been developed

using an SBTi sectoral decarbonisation approach where available. SBTi is currently

developing the Corporate Net Zero Standard Version 2, and we have been actively

engaged in their consultation to shape the new standard.

Actions by our stakeholders are crucial to us being able to deliver our emissions

reductions targets. We engage with policymakers and regulators aiming to achieve

the required planning and permitting changes in the UK and US, and in the US where

we are an energy supplier, policies that promote energy efficiency and the use of low-

carbon fuels. We also work with customers to promote efficient solutions, industry

groups to advance new technologies, and our suppliers to help decarbonise the

value chain.

decarbonisation. While the costs of some

technologies continue to fall, the costs of other

renewable technologies have risen, which is also

impacting policy and the pace of the transition.

We’ve made good progress across multiple areas

of our emissions inventory, including where we

have direct control. Where we don’t have direct

control, achieving our near-term targets looks

increasingly challenging as we are reliant on policy

and regulatory dependencies. Below, we provide

an update on progress against some of our

targets, including some of the most material

dependencies that could impact our progress.

Moving forward, we will continue to prioritise

reductions where we have operational control and

influence areas where we do not, refining our

approach based on our results. More detail on our

targets, key dependencies and challenges can be

found in our CTP, available on our website.

We committed to

Achieve net zero by 2050     

for Scope 1, 2 and 3 GHG

emissions

We continue to work towards our ambitious

targets. However, we are reliant on external

dependencies such as policy and regulatory

support and wider sectoral decarbonisation.

Scope 1 and 2 GHG emissions for

2025/26 were 7,511 ktCO2e, outside of

our range set out in the CTP, and down

3% from our 2018/19 baseline.

Progress to target1,2 %	Target 2030/31
3%	60%

Scope 1 GHG emissions in areas where we have

greater direct control have fallen from the baseline

year. Gas operational emissions from fugitives and

venting comprise about 10% of our Scope 1 and 2

emissions and have decreased 4.2% from the prior

year. These emissions are largely driven by the

volume of gas travelling through our pipes and are

being addressed through investments in cross

compression, pipeline coatings, vacuum purging,

and rehabilitation of leak-prone piping.

In 2025, we replaced 315 miles of leak-prone pipe

in New York and Massachusetts. This long-

standing programme delivers emissions reductions

each year. This programme is progressing within

the projected ranges of our CTP. We are also

evaluating advanced leak detection technologies,

including stationary, satellite, aerial and ground

based solutions to quickly identify and mitigate

emissions sources.

Scope 1 GHG emissions where we have less direct

control are outside of the range that we set out in

our CTP. The most challenging area is emissions

from our Long Island generation facilities, where

emissions increased by 19% from the previous

year. These units burn oil and gas and are

contracted to the Long Island Power Authority

(LIPA), which controls when and how much they

run to maintain reliable energy supply in the region. 

1.Includes Scope 2 location-based emissions only.

2.Near-term targets approved by Science-Based Targets initiative

(SBTi) and aligned to the Paris Agreement and a 1.5ºC pathway.

National Grid plc Annual Report and Accounts 2025/26	41	Strategic Report	Corporate Governance	Financial Statements	Additional Information
Responsible Business review cont. Our environment

Our 2025/26 GHG emissions footprint across direct and indirect sources was 37,015 ktCO2e

Our Long Island generation assets are currently

expected to be materially depreciated by 2040,

Upstream Scope 3	Supply chain and other upstream emissions
	7,012kt
	18.9% of total footprint
	–Construction and maintenance of energy infrastructure –Equipment and components –Well-to-tank emissions for generation and transportation of electricity
Scope 1 and 2	Power generation	Operation	Administration
	3,929kt	3,356kt	226kt
	10.8% of total footprint	9.1% of total footprint	0.6% of total footprint
	–Electricity generation from fossil fuels	–Line losses from our electricity transmission and distribution networks –SF6 leaks from electrical equipment –Leaks and venting from our gas network –LNG venting and fuel	–Building energy consumption –Company cars –Commercial fleet
Downstream Scope 3	Administration	Retail energy: Sold Gas1	Retail energy: Sold Electricity1
	86kt	19,736kt	2,670kt
	0.2% of total footprint	53.4% of total footprint	7.2% of total footprint
	–Business travel –Employee commuting –Waste	–Emissions from the gas that we sell to our customers	–Emissions from the electricity that we sell to our customers

aligning with New York State’s zero-emissions

electricity targets. However, given delays to

offshore wind and anticipated load growth,

achieving a sufficient reduction in operating hours

in the timeframe required to hit our near-term

targets will be challenging, and fossil-fuel

generation assets may continue to operate beyond

2040 to support grid resilience.

Our Scope 2 emissions decreased by 15% during

2025/26. These are almost entirely comprised of

electricity network line losses and are broadly in

line with the trajectory set out in our CTP.

Electricity network line loss emissions are primarily

influenced by the location and carbon intensity of

generation and the location and magnitude of

demand, which are outside of our control. If our

jurisdictions see a slowdown in the pace of

decarbonisation, this will slow the pace of emissions

reductions from line losses. We indirectly reduce the

emissions from electricity line losses by connecting

low-carbon generation to our networks. We calculate

emissions from losses using the average carbon

intensity of electricity in the regions where we

operate, as published by the UK Government and

the US Environmental Protection Agency (EPA).

In the UK, there has been significant progress in

decarbonising the grid. The continued

implementation of various policy reforms, including

connections and planning, is required to support

ongoing progress. For US line loss emissions to

decrease in line with our wider targets, we would

need to see a wider societal increase in the pace of

clean energy development. This would require

addressing wider challenges around permitting,

interconnection, and customer affordability in

addition to current state government activities related

to renewable generation.

Regarding specific sub-targets for Scope 1 and 2,

from a 2018/19 baseline:

–The carbon intensity of our power generation

(Scope 1 GHG emissions) has increased by 3%

per MWh against a target of reducing by 90% by

1.Retail energy emissions are primarily driven by the gas and electricity we sell to our customers. Reducing these emissions depends on a

combination of actions we take, customer choices, wider energy system decarbonisation, and policy and regulatory frameworks.

2030/31 and 92% by 2033/34.

–We’ve reduced absolute Scope 1 and 2 GHG

emissions (excluding generation) by 26% against

a target of 50% by 2030/31.

We report on our power generation emissions

intensity as part of our SBTi targets. Since we

completed the sale of National Grid Renewables in

2025, our generation portfolio is made up solely of

gas and oil generation assets, which are operated

by LIPA. With this change, achieving this target is

very challenging, requiring fuel switching or carbon

capture technologies which are not yet

commercially viable.

20% of our light-duty vehicles are

electric vehicles.

Progress to target %	Target: 2030/31
20%	100%

We are making progress against our target to

move to a 100% electric fleet for our light-duty

vehicles, however, we continue to face challenges

with vehicle cost and availability. This year, we

have added 219 electric vehicles to our

commercial fleets, bringing our total to 1,235 EVs,

20% of our total number of light-duty vehicles.

Achieving this target is dependent on the cost,

availability, and performance of vehicles with the

required characteristics to meet operational needs,

which makes achievement of this target

increasingly challenging.

This year, we also introduced our first heavy duty

electric vehicle to our fleet, a box truck with a 230-

mile range based at our Sutton depot in

Massachusetts.

Moving forward, we will consider strategies to reduce

emissions from transport that are informed by vehicle

availability, use cases and conditions in the regions

where we operate, and cost effectiveness. We will

keep this target under review.

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Responsible Business review cont. Our environment

SF6 emissions from our operations are

down 43%.

Progress to target1 %	Target: 2030/31
43%	50%

We continue to reduce SF6 emissions caused by

emerging leaks, resulting in GHG emissions

reductions of 43% against our 2018/19 baseline.

The majority (around 80%) of the SF6 we use on our

networks is in UK ET. Our focus is on SF6 leak

detection and repairs, as well as increasing our

investment in SF6 alternatives, working with other

UK transmission owners.

Absolute energy consumption in our

flagship offices is down by 48%,

exceeding our 20% target.

Target: 2030/31	Progress to target %
20%	48%

We have reduced energy consumption in our flagship

offices by 48% against our 2019/20 baseline,

exceeding our 20% target, by optimising heating,

ventilation, air conditioning, and lighting to promote

efficiency while meeting the needs of our colleagues.

We also indirectly contribute to emissions

reductions through the purchase of renewable

certifications. In 2025/26 we achieved 62%

(2024/25: 36%) of renewable electricity purchased

with renewable certification globally, driven by the

UK, where 99.7% (2024/25: 49%) of electricity

purchased for operational purposes was with

renewable Energy Attribute Certification (EACs)

where we have choice over purchasing sources.

For leased and other sites where we do not have

purchasing decision choice, we do not have

control over whether the electricity purchased is

with renewable credentials. The increase

compared with the prior year mainly reflects the

disposal of Grain LNG; as the asset did not hold

EACs, its exit from the Group has led to a

significant increase in the UK percentage.

Our Scope 3 emissions (excluding sold

electricity) were up 11% from our

2018/19 baseline.

Progress to target1 %	Target: 2033/34
(11%)	37.5%

Our Scope 3 emissions (excluding sold

electricity) for 2025/26 were 26,833

ktCO2e.

The majority of our Scope 3 emissions result from

the use of sold gas we deliver to our customers in

the US, with these emissions making up about

75% of our Scope 3 emissions target.

Meeting our Scope 3 sold gas target would require

an additional estimated 1.2-1.8 million gas

customers converting to electric heat by 2033/34.

We continue to seek to enable the connection of

low-carbon electricity generation that is necessary to

support customers in switching to electric heat, and

we offer incentive programmes to encourage

customers to adopt heat pumps. However, to further

motivate heat pump adoption, we would need to

see reductions in the upfront cost of heat pumps, as

well as efficiency gains in heat pump technology.

Achieving the emissions reductions required to meet

our Scope 3 target is therefore challenging.

Emissions within our supply chain represent

approximately 18% of our Scope 3 emissions

target, and we have seen emissions increase by

2% during 2025/26. We projected this in our CTP

due to increased spend on goods and services

associated with the construction of new energy

infrastructure.

Regarding specific sub targets for Scope 3, from a

2018/19 baseline:

–The carbon intensity of power generation and

sold electricity (Scope 1 and Scope 3 GHG

emissions) decreased by 1% against a target of

reducing by 86% by 2033/341.

–We’ve reduced absolute GHG emissions from

gas sold by third parties by 10% against a target

of 37.5% by 2033/341,2.

62% of our UK supply chain emissions3

are from suppliers that have formally

committed to setting a science-based

target (SBT). 32% of our US supply chain

emissions3 are from suppliers that have

established a roadmap towards science-

based targets.

Progress to target1 %			Target: 2025/26
	UK	62%	80%
	US	32%	50%

We continue to collaborate with key suppliers who

contribute significantly to the emissions associated

with the goods and services we procure. In the UK,

62% of our UK supplier GHG emissions are from

suppliers who are committed to setting an SBT. In

the US, 32% of our supplier GHG emissions are

from suppliers who have established a roadmap

toward SBTs. As our supply chain emissions data

and insights have matured, we have moved from

reporting a percentage of suppliers committed to

SBTs or an SBT roadmap, to the percentage of our

supply chain emissions covered by those suppliers.

Our suppliers have many dependencies that are

outside of their control, including the lack of SBT

pathways for certain sectors. SBTi is currently

consulting on the standards used to set validated

SBTs, with new standards expected to be formally

in place at the start of 2027. Because of this, we are

recommitting to our supply chain engagement,

retaining the target but extending the target date to

2030/31 and reporting a percentage of emissions

rather than a percentage of suppliers. We had

stated that this target was under review in our

2024/25 disclosure.

1.Near-term targets approved by SBTi and aligned to a well below

2°C pathway.

2.Third-party sold gas, a US only emission, are downstream

emissions associated with the combustion of natural gas

delivered through our network but sold by a company other than

National Grid. This differs from Scope 3 Cat. 11 GHG Protocol

guidance, which otherwise advises to consider only the end use

of goods sold by the reporting company itself.

3.Carbon Strategic Supplier Engagement: GHG emissions from

Scope 3 Cat 1 and Cat 2: Purchased Goods and Services and

Capital Goods only.

National Grid plc Annual Report and Accounts 2025/26	43	Strategic Report	Corporate Governance	Financial Statements	Additional Information
Responsible Business review cont. Our environment

We have developed a new responsible supply chain

We are committed to

strategy to work toward embedding sustainability

criteria into our strategic sourcing process. This

strategy focuses on the changes we need to make to

our contracting approach, tender strategy, and

engagement to drive change. More detail on this

strategy is available on our website.

Key construction materials such as concrete and

steel have significant carbon footprints and more

sustainable alternatives are difficult to source and

come at a higher cost. To see reductions in supply

chain emissions in line with our Scope 3 target, we

would need to see a significant reduction in the

carbon intensity of construction materials. In UK

ET, as part of our RIIO-T3 business plan, we’ve set

targets against some of our key carbon hotspot

areas, enabling us to influence how suppliers

respond and make changes to their operations.

Air travel emissions are down 45% from

our 2019/20 baseline.

Progress to target %	Target 2025/26
45%	50%

This year, absolute emissions from business air

travel are lower than the previous year at 6.1

ktCO2e, a 45% reduction from our baseline.

Air travel emissions are a very small portion (0.01%) of

our total Scope 3 emissions. While we have not hit our

target, we have made good progress in this area.

We’ve implemented hybrid working, consolidated

meetings to reduce the number of trips necessary and

embedded sustainability considerations into our travel

policy, discouraging travel where it is not necessary.

As a transatlantic business, we try to balance the

business benefits of in-person meetings with creating

efficiencies by reducing air travel. We remain focused

on reducing emissions in our most material areas and

reinforcing our travel policy to drive ongoing

progress, and we will not renew this target.

Protecting our natural

environment

In the UK we are committed to restoring the land

we manage. We use a natural capital approach to

measure the impact of improvements we make on

the non-operational land at our own sites based on

financial value estimations.

Due to significant differences in the conditions of

habitats and levels of biodiversity present in the

landscape between the UK and US, in the US our

efforts focus on the preservation of the natural

lands that we own. Acreage reported in the US

includes lands we have enrolled in our integrated

vegetation management (IVM) programme, which

aims to preserve biodiversity by optimising

trimming on our rights-of-ways, and other nature-

related projects.

On the land we manage in the UK, we have

restored the natural environment by 15%.

Target	Progress to target %
10%	15%

A natural capital approach allows us to

demonstrate environmental restoration by

supporting and measuring beneficial changes to

land management and biodiversity. This is only

driven by activities in our UK ET business.

We manage around 1,800 hectares of non-

operational land in the UK, including hedgerows,

ancient woodland, wildflower meadows, wetlands,

grasslands and peat bog. We committed to

improving its environmental value by at least 10%

by 2026. Since 2020/21, we have achieved a 15%

increase. In our final year of the RIIO-T2

Environmental Incentive (2025/26), we delivered a

further uplift by introducing nine new strategic

partnerships and expanding one existing

agreement.

UK ED focuses on improving biodiversity on our

operational sites. We have committed to a six–year

formal partnership with Heart of England Forest to

support woodland management and restoration in

our West Midlands licence area. This past year, we

surveyed 18 sites to establish baseline habitat type

and quality, allowing us to develop habitat

maintenance plans to guide vegetation

management on these sites.

On the land we manage in the US, we

have enrolled 1,162 acres in our IVM

programme and other nature related

projects.

This year, we launched a collaborative BioAudit

biodiversity study with scientists and experts from

ACRT Services to help us assess the habitat quality

of our rights-of-ways. These corridors play an

important role in enhancing plant biodiversity and

ensuring that pollinators and wildlife have a place

to call home.

The data from the on-site assessments help us to

proactively plan and take measures to improve

habitat on these sites.

We also completed a nature-based solutions pilot

with Jacobs Engineering, Biomimicry 3.8, and EMX

Industries on a substation rebuild in Massachusetts.

The initiative aimed to solve common project

challenges using nature-inspired solutions. Eight

nature-based interventions were identified and

scoped into the substation rebuild design,

including moss walls, rain gardens and vegetated

filter strips.

Nature restoration at our Bell Rock

substation expansion project,

Fall River, MA

National Grid plc Annual Report and Accounts 2025/26	44	Strategic Report	Corporate Governance	Financial Statements	Additional Information
Responsible Business review cont. Our environment

We are

Investing in the decarbonisation

of the future of energy

We invested £9.8 billion in green

infrastructure and projects in 2025/261.

We play a key role in enabling and accelerating the

move to a cleaner energy future. Network

investment is vital for connecting new low-carbon

power generation and storage that will be needed

in the coming decade to accommodate the

expected rises in electricity demand and the

connection of renewable energy resources.

Our proportion of green capital expenditure

increased in 2025/26, aligning with EU Taxonomy

principles for climate change adaptation and

mitigation. In 2025/26, around 88.5% (£9.8 billion)

of our Group’s capital expenditure was aligned,

compared with 81% (£7.7 billion) in the previous

year. Green capital expenditure share of total

capital investment, which includes capital

prepayments and equity contributions, was 85%.

Our first six projects in Wave 1 of our Great Grid

Upgrade in the UK are now in construction, and in

the US, we continue to progress with permitting

requirements for our Upstate Upgrade projects in

New York. The essential upgrades that we’re

delivering in the US and UK will help to create a

modernised, stronger and cleaner energy network

and will generate new jobs.

These infrastructure investments also support

connections of renewable generation to the grid in

our territories. In 2025/26, we connected 1,125

MW of energised renewable capacity to our

networks across the UK and US.

1.Aligned to the principles of EU Taxonomy for sustainable

investment.

We are committed to

Using resources responsibly

We manage our environmental impact

with a focus on pollution, waste and

water use.

Various aspects of our work create waste,

including cleaning up former gas plant sites, retiring

old fossil fuel assets and leak-prone equipment,

and building grid infrastructure. We work to ensure

that our waste is correctly disposed of with

appropriate environmental permits and in

compliance with regulatory standards in the

applicable regions.

The different categories of waste are summarised

in our data tables, available on our website. Some

waste is classed as hazardous waste. This arises

from the removal of contaminated land during

commercial property activity and the disposal of oil

and polychlorinated biphenyl (PCB) or lead-

contaminated materials.

We recycle, refurbish and reuse materials at asset

refurbishment and investment recovery facilities in

the UK and US, promoting circularity within our

operations. We also work to reduce our waste

through initiatives such as the deployment of

reusable covers to replace plastic bags on units in

our plant centres in the UK. We’re also using

recycled materials in our operations, including the

use of copper with recycled content for

transformers in our Eastern Green Link 2 project.

More on our commitments around resource use

and waste management can be found in our

Environmental Operations Policy.

Our water use relates almost entirely to water used

for generation cooling purposes. Abstracted water

is not altered other than being slightly warmed by

the process. Water discharge temperatures are

closely monitored and follow applicable

regulations. This year, 1,234 million cubic metres

were withdrawn. Of this total, 99.6% relates to the

use of seawater for cooling generation assets in the

US and is returned to the sea in accordance with

permitted temperature limits.

We are

Adapting to a changing climate

We take action on our climate change

risks and opportunities and invest in

climate change adaptation activities.

Climate hazards are projected to increase in

frequency and severity in the future, with high

temperatures and coastal and river flooding of

particular concern in the areas where we operate.

Our approach to climate resilience, and addressing

risks arising from global warming impacts is

outlined in our TCFD report on pages 61-66. In

addition, our EU Taxonomy report details our

climate change adaptation expenditure.

£9.8bn

2025/26 Green capital

expenditure

Aligned to EU Taxonomy principles for

climate change adaptation and

mitigation

1,125 MW

Energised renewable capacity

connected in 2025/26

National Grid plc Annual Report and Accounts 2025/26	45	Strategic Report	Corporate Governance	Financial Statements	Additional Information
Responsible Business review cont. Our customer and communities

We acknowledge that there is a need for further

support to our customers. In both the UK and US,

support is needed for customers facing high

energy bills. In the UK, customers face long

connection wait times, negatively impacting

consumer sentiment. However, NESO has initiated

reforms to the connections queue that will help us

to deliver faster, more strategic grid connections

for our customers.

We are committed to

Supporting an affordable

energy transition

Our

customers and

communities

As we help to build out the network of the future, we aim

to create social value for our customers and communities.

We work to create economic growth in the communities

we serve and support affordability as a key part of the

energy transition.

We provide assistance to our customers and communities to help manage the

rising costs of energy and necessary infrastructure upgrades, working to

maintain positive relationships with our stakeholders.

Our skills development programmes provide people from disadvantaged

communities with access to training and employment opportunities, helping to

build our potential workforce of the future.

Our colleagues participate in volunteering events and projects to foster positive

relationships with our customers, communities and local regulators.

We have established the Grid for Good

We are committed to

Energy Affordability Fund to provide

assistance with energy bills.

National Grid remains committed to ongoing

support for those that cannot meet energy costs

and maintains the Grid for Good Energy

Affordability Fund to provide bill assistance. This

fund assists vulnerable households and businesses

struggling with energy costs via our charity

partners including the Fuel Bank Foundation, the

Centre for Sustainable Energy and the National

Energy Foundation.

We worked with key charity partners in the UK and

US to provide assistance with energy efficiency

upgrades, emergency financial support and

provision of energy advice to low-to-moderate-

income customers. In the last year in the UK, we

supported over 20,000 households through our

programmes.

The current Grid for Good Energy Affordability

Fund will run through 2026/27 to continue financial

support for organisations that assist vulnerable

households. Each year, the fund commits

£3.5 million of support in the UK and £3.3 million in

the US.

More information on how our funding is supporting charities and organisations to provide relief to vulnerable households can be found on our website.

In the US, we offer a range of programmes to help

income-eligible families and customers manage

their energy bills. These include tiered discount

rates, bill discounts, energy efficiency programmes,

budget billing structures and payment extensions.

However, we acknowledge that there is more to be

done to support bill assistance to help our

customers manage rising costs.

	More details on our contributions to UK bills and average billing to US households can be found in our Responsible Business data tables.
	More information on our affordability initiatives in ED, NY and NE can be found on pages 19 — 21

Accelerating social mobility

We support social mobility in the communities we

serve through partnerships with registered

charities, not-for-profit organisations, social

enterprises, educators, and our supply chain.

With these organisations, we have created skills

and employability pathways that help ensure

everyone has the opportunity to reach their

potential, regardless of background. Our work is

focused on improving awareness of the energy

industry and National Grid as an employer,

providing energy education programmes to

disadvantaged youth and work-ready adults, and

offering coaching for potential future talent.

We’ve exceeded our goal to upskill 45,000 people

in our communities and we remain dedicated to

actively supporting these programmes.

We ranked 8th out of the top 75 employers in the

2025 UK Social Mobility Index (SMI), rising 34

places from the previous year. This achievement

demonstrates our leadership in building an

inclusive, representative, and successful workplace

that supports upward social mobility.

National Grid plc Annual Report and Accounts 2025/26	46	Strategic Report	Corporate Governance	Financial Statements	Additional Information
Responsible Business review cont. Our customer and communities

We are

Engaging directly in our

communities through

volunteering

Across the UK and US we have delivered

52,620 volunteering hours in 2025/26 to

support our communities.

Progress to target (hours)	Target: 2030/31
	500,000

Our volunteering programmes enable our

colleagues across the UK and US to connect with

their communities and have a tangible impact on

the causes that matter. We work with many partner

organisations to provide opportunities for

colleagues to volunteer their time in local

communities. Our volunteer efforts focus on

increasing access to affordable energy, increasing

access to STEM/STEAM education and building

community resilience. Colleagues this year have

logged 52,620 volunteering hours, bringing our

total to 292,611 volunteering hours since 2021.

Case studies on our volunteering engagement can

be found on our website.

We act

On the feedback we receive

from our customers on the

service we provide

Across the UK and US, we serve millions of

households and thousands of businesses. We are

committed to delivering secure and reliable energy

as affordably as possible, maximising the capacity

of our assets and ensuring our customers benefit

from an efficient and reliable network.

We recognise that there has been limited progress

across the business, especially in the US, on

customer satisfaction due to bill increases and

delays in connecting to our network. We are

listening to feedback and taking steps to address

these issues.

US customer satisfaction

This year, our US businesses refocused their CSAT

metric to better reflect overall customer experience.

The metric is measured through our monthly Brand

Image Relationship study and through post-

interaction customer surveys, and it is designed to

help us improve customer experience and

strengthen customer-centred thinking across our

business.

In 2025/26, New York saw a CSAT score of 72.8%

and New England saw a score of 72.2%.

Customers in both regions faced high fuel prices

and temperature extremes that increased bills,

which negatively affected customer perceptions.

We recognise that we need to do more to improve

customer satisfaction. We are committed to raising

awareness of financial assistance and other

services that help customers manage their energy

bills. In Massachusetts, we launched a new tiered

discount rate programme that expands eligibility

and assistance for our most vulnerable customers.

In New York, our NIMO rate plan, approved by the

Public Service Commission, includes

enhancements to affordability programmes.

We also held in-person customer assistance events

across our US jurisdictions. These events bring our

customer service specialists into community centres,

senior centres and other public gathering places, to

meet directly with customers. Here, our customers

can ask questions, discuss assistance programmes

and get help with our energy efficiency initiatives.

These events are critical to connect our customers to

the support programmes and tools they need.

We are in the process of implementing Kraken, a

groundbreaking, cost-effective platform that will

support end-to-end ownership of the customer

experience. We will be the first major regulated US

utility to adopt Kraken, which will improve the

customer experience by simplifying and

modernising how customers interact with us.

We continue to deploy Advanced Metering

Infrastructure (AMI) technology across New York

and Massachusetts, giving customers greater

visibility of their energy use. We have cumulatively

deployed over 500,000 smart meters in New

England and over 1.5 million in New York.

UK ED customer satisfaction

In UK ED, we have delivered a high level of

customer satisfaction for 2025/26 with a score of 9

out of 10.

We identify areas of best practice across our

licence areas to expand those solutions across the

business. We continue to undertake customer

service training, have customer engagement group

forums, and learn from the activities of other

distribution network operators to ensure we are

making the right decisions for our customers and

improve the customer experience.

UK ET customer satisfaction

In UK ET, Quality of Connections remains a pivotal

initiative, underpinning our commitment to

capturing valuable customer insights at every stage

of the connection lifecycle by measuring customer

satisfaction and gathering feedback. In UK ET, our

customer satisfaction score for 2025/26 was 7 out

of 10, demonstrating a positive shift compared to

last year, marked by significant industry reform and

rapid change.

NESO initiated reforms to the existing connections

queue that will aim to help UK ET deliver faster,

fairer and more strategic grid connections for

existing and future customers. For more on these

reforms, see page 18.

UK ET also drives broader societal economic

benefits to support customer satisfaction. For

example, we are currently upgrading our Didcot

substation in Oxfordshire to enable the connection

of data centres and battery storage systems to the

electricity transmission network. Located just two

miles from the UK’s first AI Growth Zone at

Culham, Didcot substation will boost grid capacity

for future digital projects. It will also connect 300

MW of battery schemes, helping to meet growing

demand for flexible, zero carbon power in the

region. Read more about the Didcot substation

project on our website.

NGV customer satisfaction

NGV conducts customer satisfaction surveys

across its business units and achieved good

scores overall in 2025/26.

Our UK subsea electricity interconnectors and US

NGV operations have scored the following:

IFA, IFA2 and Viking

92%

Prior year: 86%

BritNed

90%

Prior year: 87%

Nemo

91%

Prior year: 92%

The US Northeast

8 out of 10

Prior year: 8 out of 10

National Grid plc Annual Report and Accounts 2025/26	47	Strategic Report	Corporate Governance	Financial Statements	Additional Information
Responsible Business review cont. Our people

We are

Investing in our people and

building the skills needed to

deliver the clean energy future

Our workforce is increasing and new skills will be

needed to deliver the grid of the future. Attracting,

developing and retaining a qualified and competent

workforce requires training programmes that are

robust, comprehensive, in line with local regulations

and focused on safety and competence.

In the UK, 132 graduates participated in our

Our people

Our 33,017 colleagues across the UK and US

are central to delivering the grid of the future.

To deliver on our commitments, we need to attract, develop and retain

the skilled workforce needed to respond to changes in our external

environment and within the business.

The physical and mental health of our colleagues is central to everything

we do. We continue to focus on ensuring fair pay for all our people and

providing them with development opportunities.

graduate scheme, which aims to enhance

graduates’ capabilities while emphasising

leadership development.

In the US, 98 graduates joined our refreshed

12-month development programme, which

includes a three-week orientation, blended virtual

and in-person skills training, three months of

coaching, and rotational placements for some

roles in months six to twelve.

In the US, we also continue to have a strong

Gridtern internship programme, welcoming

147 interns on summer internships in 2025.

Further details on our development programmes can be found on our careers website.

Alongside early careers programmes, we provide a

wide range of development opportunities to our

colleagues through external learning providers,

including on-demand digital learning, behavioural

science-based development, team effectiveness

sessions and tailored virtual coaching for leaders

and senior colleagues.

We also run targeted leadership programmes to

identify and develop future senior leaders and to

support new and experienced managers in

becoming effective people leaders.

To achieve our commitments and deliver the grid

of the future, we need to attract, hire, and retain

people from a wide array of backgrounds, who

have different experiences and perspectives. We

take a clear stance against discrimination. Our

Global Recruitment and Hiring Policy ensures that

individuals identifying themselves as having a

disability receive fair consideration for all vacancies,

with reasonable accommodations and additional

resources provided whenever feasible. We are

dedicated to equal opportunities in recruitment,

training, promotion, and career development for all

our colleagues, including those with disabilities.

We aim to drive proactive sourcing, create a

best-in-industry candidate experience, and

maintain recruitment practices that help us build a

strong future workforce. We launched a new global

careers website to provide a single, modern

platform for candidates and a more tailored and

intuitive job searching tool.

In 2025/26, 41% of our vacancies were filled by

internal promotions and moves, demonstrating our

commitment to developing talent. We are also

increasing external hiring to secure the specialist

skills required for the future. Our workforce

81%	73%	77%
Employee engagement index in 2025/26	‘Safe to say’ in Grid:Voice in  2025/26	Employee wellbeing index in 2025/26

planning helps us anticipate capability needs and

shape targeted recruitment strategies, including

engaging with relevant talent pools ahead

of demand.

For more information, see our People Capability

and Capacity Group Principal Risk on page 35.

National Grid plc Annual Report and Accounts 2025/26	48	Strategic Report	Corporate Governance	Financial Statements	Additional Information
Responsible Business review cont. Our people

We are committed to

A workplace where all

colleagues can thrive

At National Grid, we believe that diversity of

thought drives innovation, enhances performance,

and strengthens our ability to deliver for our

customers and communities. We are committed to

fostering a workplace that is inclusive, respectful

and empowering, where every individual feels

welcome and supported.

Our focus is on our work environment, ensuring

colleagues are treated fairly, respecting the right to

differing opinions, and maintaining a safe work

environment. We will continue to adapt our

approach to meet the needs of our people, our

industry, and our stakeholders while staying true to

our values of doing the right thing and finding a

better way.

We are committed to

Creating an inclusive culture

Fostering a culture in which colleagues

feel safe to speak up and confident their

voices are heard by the Group Executive

Committee and Board remains a priority.

Our leaders play a central role in shaping this

culture, supported by a global learning curriculum

that provides inclusive leadership training for

people managers.

Our Employee Resource Groups (ERGs) play a vital

We are committed to

role at National Grid. Open to all colleagues, 33%

of our workforce are members of at least one ERG.

ERGs help build awareness of inclusion and

belonging by offering support and development

opportunities, enabling colleagues to bring their

true selves to work and reach their full potential.

We carry out two annual employee engagement

surveys to provide the Group Executive Committee

and Board with further insight and understanding

of our culture and engagement. In our 2025/26

survey, our employee engagement index was 81%

and our Safe-to-Say score was 73%,

demonstrating that our employees feel engaged in

their work and empowered to speak up.

Throughout the year we were recognised for

numerous industry awards, including being named

in Times Top 50 Employers for Gender Equality, a

Glassdoor 2026 Best Place to Work, 8th out of the

top 75 employers in the 2025 UK SMI, and The

Equality 100 Award: Leader in LGBTQ+ Workplace

Equality Distinction by the Human Rights

Campaign Foundation.

In 2025, we participated in the Workforce

Disclosure Initiative for the eighth consecutive year,

achieving a disclosure score of 88% compared to

the sector average of 67%.

We are committed to

Leading the industry on

employee health and wellbeing

Our employee wellbeing index is 77%.

We aim to empower our colleagues to prioritise

their health and wellbeing by promoting healthy

practices and by offering wellbeing resources

through multiple channels. By focusing on health

and wellbeing, we aim to foster an environment

where everyone can thrive together.

In 2025/26, we continued to deliver our Thriving

Together health and wellness ambition to support

our people in feeling engaged and empowered to

prioritise health, wellbeing, and performance. We

provide our colleagues with educational and

support resources, materials for managers to

promote health and wellbeing on their teams, a full

range of health and wellness benefits, support for

neurodiverse colleagues, and on-site health

professionals. We also provide digital health and

wellbeing apps and access to an Employee

Assistance Programme to our colleagues in the UK

and US.

Ensuring all colleagues receive

fair and equitable pay

We are continuing to focus on our

gender pay gap.

In the UK, we remain an accredited Living Wage

Foundation employer, which demonstrates that we

go beyond the Living Wage requirements,

voluntarily paying our trainees the Living Wage. We

undertake a Living Wage review each year to

ensure continued alignment. Our commitment to

the Living Wage for our direct workforce also

extends to our contractors. In the US, colleagues

are paid above the statutory minimums. We also

Gender demographic as at 31 March 20261
Our Board2		Senior management3		Whole company3
46%		44%		25%
Male 6	Female 5	Male 90	Female 72	Male 24,803	Female 8,214
Male		Male		Male
Female		Female		Female
1.Companies Act 2006 disclosure. We have included information relating to subsidiary directors, in accordance with the Companies Act 2006. Senior management is defined as those managers who are at the same level as, or one level below, the Group Executive Committee. It also includes those who are Directors of subsidiaries where we have a majority interest, or who have responsibility for planning, directing or controlling the activities of the Group, or a strategically significant part of the Group, and are employees of the Group. 2.Board refers to Directors of National Grid plc as defined on page 256 of this document. 3.In scope are active, permanent employees. Out of scope are non-employees, temporary staff and interns.

provide a range of competitive benefits to our

colleagues that go beyond statutory minimums.

When making remuneration decisions for our

Executive Directors and other senior leaders, our

People & Remuneration Committee takes account

of the remuneration arrangements and outcomes

for the wider workforce.

We review gender and ethnicity pay gaps annually

and our UK gender pay gap is reported one year in

arrears in accordance with UK legal requirements

on gender pay gap reporting. Our UK base gender

pay gap continues to be minimal.

Our gender pay gap disclosure can be found on our website

Further information on Board workforce engagement can be found on page 95 Further details on our culture can be found on our website.

National Grid plc Annual Report and Accounts 2025/26	49	Strategic Report	Corporate Governance	Financial Statements	Additional Information
Responsible Business review cont. Our Responsible Business Fundamentals

We are committed to

Safely, reliably and efficiently

connecting millions of people

to the energy they use

Health and safety

The health and safety of all our colleagues and

contractors is paramount. We require our people

to demonstrate our company-wide safety

principles of:

–Safe to Say: open and honest conversations

–Safe Choices: make smart decisions

Responsible

Business

Fundamentals

Every day, we safely, securely and reliably

connect millions of people to energy,

prioritise resilience and operate responsibly.

Our Responsible Business Fundamentals are the foundation of the pillars of our

Responsible Business Charter. We aim to continue to deliver on what is expected

of us and to be a compliant and ethical business in everything we do. We seek to

do this by ensuring safe and reliable operations and living our values, while

influencing our partners and supply chain and holding them to the same standards.

We invest in technology and governance, monitor security and risks, and advocate

for responsible business practices.

–Safe to Stop: stop the job whenever there is a

safety concern

–Safe to Learn: learn from every experience

We endeavour to mitigate risks and eradicate

injuries to our workforce, supported by our safety

management processes and Group safety

reporting system. To promote safe practices, we

maintain a full range of internal safety policies and

procedures, including our Employee Safety

Handbook and various process specific

procedures. We are also in the process of

implementing Cority, our enhanced safety reporting

system, to drive continuous improvement and

ongoing learning.

There have been no fatalities in 2025/26.

Lost time injuries (LTIs)

We have recorded a Group LTIFR of 0.11 this year,

compared to 0.10 in the prior year against our

Group target of 0.10 or less, per 100,000 hours

worked (this includes contractors working on our

behalf). The majority of the injuries were linked to

common and well-known exposures such as slips,

trips and falls, musculoskeletal injuries, and struck-

by incidents.

Various initiatives have been undertaken to

intervene with rising LTIs, including safety stand-

down days, issuance of safety refocus packs, and

various campaigns and intervention groups. We

aim to prevent serious injuries and fatalities through

a focus on our six fatal risk groups, with processes

in place to thoroughly assess and mitigate safety

risks, select and apply appropriate safety controls,

and intentionally monitor changes in the work

environment.

Injuries to members of the public

This year, there have been three incidents resulting

in injuries to members of the public which involved

our assets. These events all related to our UK

ET business.

Reliability and resilience

We have maintained reliability at 99.9% across our

networks. Details per business unit can be found on

page 28. We maintain a robust business continuity

programme to ensure we maintain operations in the

event of a disaster or significant disruption.

We are also innovating to use AI and technology to

improve grid resilience. This year, we implemented

solutions to automate crew management during

storm response, piloted x-ray imaging of gas

pipelines, and tested demand response solutions for

data centres.

Further detail on resilience in our strategy can be

found in our TCFD disclosure on page 56.

Efficiently connecting customers to the

energy they use

We aim to deliver energy to the homes and

businesses of our customers in an efficient way,

and all our business units are undertaking network

projects to improve efficiency and optimise

connections.

In UK ET, we are modernising how the network is

controlled, including making upgrades to our

control centre, and engaging with NESO on

connections reform. In the US, we’ve launched the

Kraken programme to drive efficiency in the

customer experience, and New York’s Smart Path

Connect programme is enabling large-scale

renewable interconnections.

	Further information on how we operate safely and efficiently can be found on page 17.
	Further details on our initiatives to improve efficiency can be found on pages 18 — 22.

National Grid plc Annual Report and Accounts 2025/26	50	Strategic Report	Corporate Governance	Financial Statements	Additional Information
Responsible Business review cont. Our Responsible Business Fundamentals

We are committed to

Influencing our supply chain

to operate responsibly

Suppliers must adhere to our Supplier

Code of Conduct which includes

We are committed to

commitments to the real Living Wage,

compliance with the Conflict Minerals

Rule and the development of

environmental strategies and targets.

This year we transitioned our supply chain

sustainability risk assessments and data to

EcoVadis, a globally recognised platform widely

used in the UK and US utility sectors. EcoVadis

provides us with enhanced visibility, assurance and

insights into our suppliers’ sustainability practices.

Our key suppliers are determined by our UK and

US supply chain science-based targets and our

strategic supplier lists. To date, over 50% of our

key suppliers hold EcoVadis scorecards and we

will continue to engage with the remainder to

increase impact and accountability across our

supplier base.

We are a partner of the Supply Chain Sustainability

School in both the UK and US, providing free

education and learning pathways to our key

suppliers.

We are

Fair to our suppliers and

committed to paying them

promptly

We recognise that timely payment is

crucial for the financial health and

operational stability of our suppliers. We

aim to adhere to the agreed payment

terms set out in contracts or purchase

orders and our finance team works

diligently to ensure that all invoices are

processed efficiently.

In the UK, we are a signatory of the Prompt

Payment Code and we also encourage our

suppliers to adopt the principles of this code. In

2025/26, 91% of our supplier payments in the UK

and 94% in the US were paid to contractual term.

Our Human Rights Policy

Human Rights are integral to our Code of

Ethics. We aim to be an ethical company

that stakeholders want to do business

with and colleagues want to work for.

We have a separate Human Rights Policy to hold

ourselves accountable to respect the rights of our

workforce, our value chain and those impacted by

our operations and to provide a safe, secure and

inclusive work environment. We also publish an

annual Human Rights Report and Modern Slavery

Statement, outlining our approach to mitigating the

risk of modern slavery in our business and supply

chain. In our annual Modern Slavery Statement we

summarise the progress we have made, our key

policies, including their scope and focus, and the

key measures we use to assess our progress and

programme effectiveness. Further details of our

human rights and modern slavery disclosures can

be found on page 234. Further information and

copies of our policies can be found in our

Responsible Business reporting centre on our

website.

We are committed to

Being a compliant and

ethical business

We are committed to maintaining high

standards of compliance and ethical

conduct. We have established rigorous

internal incident reporting to drive the

right behaviours, identify and monitor

themes and trends, and facilitate

learning.

A breach of the Code of Ethics can have different

outcomes depending on the severity and impact

on people and our organisation, including

disciplinary actions, up to and including dismissal.

Sexual harassment prevention and response is

included in our Respect at Work policy, Grievance

policy, Code of Ethics, and Supplier Code of

Conduct. Communications across the business

have taken place to highlight our expectations and

how colleagues can speak up and report

concerns.

We have a communication and training programme

for colleagues which aims to promote a strong

ethical culture and includes mandatory e-learning

for colleagues to understand and apply our Code

of Ethics. We take a zero-tolerance approach to

fraud, bribery and corruption of any kind. We have

established policies and governance that set and

monitor our approach to preventing financial

crimes, fraud, bribery and corruption, including our

Code of Ethics. These are available on our website.

To ensure compliance with relevant anti-fraud and

bribery legislation, including but not limited to the

UK Economic Crime and Corporate Transparency

Act and the US Foreign Corrupt Practices Act, we

conduct a periodic risk assessment and

continuous monitoring of ethical conduct across

our operations and ethics processes. This includes

regular fraud and ethics risk assessments and

dashboard-driven monitoring. These processes

provide systematic verification of ethical behaviour,

detection of potential misconduct, and timely

response to ethics incidents.

Ethics, compliance and business conduct matters

are discussed quarterly at the Group Executive

Audit, Risk & Finance Committee and twice a year

at the Audit & Risk Committee. Serious issues that

meet our escalation criteria are reported in line with

our escalation process to the General Counsel

Litigation and Chief Compliance Officer, Chief Legal

Officer, Chief Executive, Audit & Risk Committee

and the Board, as appropriate. Investigations are

conducted promptly and thoroughly and, where

appropriate, acted upon.

Whistleblowing

We operate confidential internal and external

helplines that are always available in all the regions

where we operate for individuals to raise concerns

about breaches of the Code of Ethics. This is

supported by our “Speak-up” policy which sets out

how we protect anonymity and have zero-tolerance

for any form of retaliation.

Whistleblowing is regularly discussed at the Ethics,

Risk & Compliance Committee and the Audit &

Risk Committee.

Artificial intelligence

We use AI to solve problems and gain insights for

ourselves, our customers and society. We

recognise the importance of developing and using

AI in a responsible manner. Our use of AI is guided

by the principles of only using AI where

appropriate, using it as a tool to streamline and

accelerate ways of working, and always

maintaining human accountability and intervention.

Our Business Management Data Standard is

reinforced by a dedicated Responsible AI policy

and controls, due diligence assessments of both

ourselves and external partners, and an AI

Governance Council.

We’ve launched a Data and AI Academy with

training programmes for employees at all levels of

AI competence to develop the skills and

knowledge they need to thrive in a data-driven

future. We continually review and update our

approach to AI in line with regulatory, sustainability,

and technological advancements.

National Grid plc Annual Report and Accounts 2025/26	51	Strategic Report	Corporate Governance	Financial Statements	Additional Information
Responsible Business review cont. Our Responsible Business Fundamentals

We are committed to

We are committed to

Investing in developing

technologies and innovations

National Grid Partners (NGP) has

invested c.$30.8 million in Responsible

Business aligned companies since its

creation in 2018.

This year, investments included:

–training AI models to reliably identify gas pipeline

weaknesses in x-ray imagery, improving

reliability;

–grid simulations to identify areas of underused

capacity, ideal for connecting large-load

customers; and

–AI technology for data centre demand response,

reducing the need for costly network upgrades.

Further details on technological change can be found on page 14.

Find out more about our innovative projects and investments on our NGP website.

We are

We are committed to

Ensuring we have appropriate

governance in place to deliver

on our Responsible Business

commitments

Through our Board and its five sub-committees,

including the Responsible Business Committee of

the Board, we receive strategic direction and

structure to deliver sustainable shareholder value.

We also maintain an internal Responsible Business

Management Standard that applies to all our

employees and contractors and that sets out how

we will create a positive impact while delivering

excellent customer service.

For further information on the Board and Committees please refer to pages 88 — 126.

Ensuring security and risks –

cyber and physical – are

appropriately monitored

We are prioritising physical and cyber security, data

protection, and responsible AI through the

implementation of effective solutions which

manage vulnerabilities, ensure compliance with

regulatory requirements and fulfil reporting

obligations. All our employees undergo mandatory

cyber and physical security training. We enforce

data protection controls to comply with relevant

privacy laws and standards, such as the use of

strong passwords, regular software updates and

colleague training on best practices.

To minimise security incidents, protect customer

data and ensure the ethical use of AI, we keep up

to date with the latest trends and technologies,

collaborate with industry and government, and

share information and best practices.

Please see our Operational Group Principal Risks on pages 32 — 33 for further information.

Working with stakeholders and

the wider industry to promote

Responsible Business topics

and advocate for action

Details on stakeholder engagement at National Grid can be found on pages 23 — 25.

Community engagement

We engage extensively with communities affected

by our infrastructure through planning

consultations on major projects, and we use their

feedback to inform our development proposals.

Throughout the year, Board members visit

operational sites and receive updates on

community matters. This input is a key enabler for

progression of new infrastructure projects, allowing

us to support economic growth in local

communities.

International engagement

At COP30 in November 2025, we partnered with

the UK Government, Business Council for

Sustainable Energy, US Council for International

Business and other UK, US and international

organisations to participate in discussions on the

energy transition.

We focused on showcasing how we’re helping to

deliver the energy transition and on sharing best

practice with international peers. We also were able

to bring back key learnings from others to inform

our own strategy and engage our colleagues on

sustainability issues.

As part of our wider international engagement this

year, we’ve provided technical support and

participated in knowledge sharing with

governments and initiatives worldwide. Early in the

year, we welcomed a delegation of officials from

around the world on a tour of the London Power

Tunnels. Throughout the year, we hosted several

international delegations to share insights on

energy regulation, offshore wind infrastructure, and

the UK power system.

We also partnered with the British embassies in

Vietnam and Egypt and worked with global

organisations and alliances on research and

engagement. Finally, we were a major participant in

New York Climate Week and London Climate

Action Week.

Responsible political lobbying

National Grid is committed to responsible lobbying

and engagement with our elected leaders across

the jurisdictions in which we operate. We engage

with elected officials in a manner appropriate to the

jurisdiction, with attention to variations in lobbying

definitions across the geographies in which we

work.

All our lobbying and engagement is conducted in

line with the principles and targets set out within

our RBC.

We have global corporate policies on political

contributions, responsible political lobbying,

employment of former public officials and

secondment of employees into public bodies, all

accessible on our website. Our guidelines include

clear principles, an integrated management

approach, and Board accountability and oversight.

Full details of our political donations and expenditure can be found on page 235.

National Grid plc Annual Report and Accounts 2025/26	52	Strategic Report	Corporate Governance	Financial Statements	Additional Information
Responsible Business review cont. Our Responsible Business Fundamentals

Transparent reporting

Transparent and public reporting is an integral part

of being a responsible business. We remain

committed to reporting our activities, commitments

and performance in a transparent manner,

including our sustainability data and performance.

Our approach

To determine which Responsible Business issues

are important to our business and essential for us

to embed in our strategy, we undertook a double

materiality assessment in 2022. The double

materiality assessment forms the basis of our

reporting. We identified six topics that encompass

the most significant factors for our business and

that align with the priorities of our stakeholders.

We are currently in the process of refreshing our

double materiality assessment to reflect the most

current internal and external environment.

We recognise the need to adapt to changes and

remain proactive in addressing emerging

challenges and opportunities. We are committed to

continuously evolving our approach and striving for

improvement to maintain robust performance on

Responsible Business.

Further details on our material topics and double materiality assessment, as well as our work against the UN SDGs, can be found on our website.

Our Responsible Business reporting

methodology

The Directors are responsible for reporting our

Responsible Business data as of 31 March 2026,

in accordance with the reporting criteria as set out

in Our Reporting Methodology document. Our

reporting methodology document presents metric

definitions, scope and calculations and underpins

our reporting.

For further details, please refer to our Reporting Methodology document on our website.

Scope of Responsible Business

reporting

Our methodology applies the GHG Protocol

operational control approach across all emissions

and environmental metrics unless stated otherwise.

Key changes to the Group’s global operations over

the past three years have been reflected in the

scope of our Responsible Business reporting,

namely:

–Grain LNG and National Grid Renewables were

disposed of in November 2025 and May 2025

respectively and are excluded from 2025/26

Responsible Business reporting, in line with our

disposals policy.

–The Electricity System Operator (ESO) separated

from National Grid on 1 October 2024, with the

NESO established under government ownership;

ESO data is excluded from 2024/25 reporting in

accordance with our disposals policy.

–Viking Link, the UK–Denmark subsea

interconnector, became operational in

December 2023 and is fully included across all

relevant Responsible Business metrics from

2024/25, following inclusion of the

“interconnector capacity” metric for 2023/24, as

it was operational by 31 March 2024.

Our reporting centre

Beyond our Responsible Business review

and TCFD statement in this report, we also

produce supplementary reports aligning to

established sustainability reporting

standards:

–Responsible Business data tables

–EU Taxonomy

–Green Financing

–SASB

–GRI

–Our Reporting Methodology

Our Responsible Business reporting centre

on our website consolidates our suite of

documents, policies and our commitment to

reporting.

National Grid plc  Annual Report and Accounts 2025/26	53	Strategic Report	Corporate Governance	Financial Statements	Additional Information
Task Force on Climate-related Financial Disclosures (TCFD)

Understanding

the potential

impacts of

climate change

CA 2006 requirement	TCFD recommendation
Governance
Section 414CB (2A)(a)	a) Describe the Board’s oversight of climate-related risks and opportunities: pages 54 – 55
	b) Describe management’s role in assessing and managing climate-related risks and opportunities: page 55
Risk Management
Section 414CB (2A)(b)	a) We describe the organisation’s processes for identifying and assessing climate-related risks: page 61
	b) We describe the organisation’s processes for managing climate related risks: page 61
Section 414CB (2A)(c)	c) We describe how processes for identifying, assessing and managing climate-related risks are integrated into the organisation’s overall risk management: page  61 – 66
Strategy
Section 414CB (2A)(d)	a) We describe the climate-related risks and opportunities the organisation has identified over the short, medium and long term: pages 62 – 66
Section 414CB (2A)(e)	b) We describe the impact of climate-related risks and opportunities on the organisation’s businesses, strategy and financial planning: pages 62 – 66
Section 414CB (2A)(f)	c) We describe the resilience of the organisation’s strategy, taking into consideration different climate-related scenarios, including a 2oC or lower scenario: pages: 56 – 60
Metrics and Targets
Section 414CB (2A)(h)	a) Our metrics used to assess climate-related risks and opportunities in line with our strategy and risk management processes: pages 67 – 68
N/A	b) Our Scope 1, Scope 2 and Scope 3 greenhouse gas (GHG) emissions and the related risks: pages 40 – 44 and 67 – 68
Section 414CB (2A)(g)	c) Our targets used to manage climate-related risks and opportunities and performance against targets: pages 67 – 68

At National Grid, we recognise that our

networks and operations are crucial to

transforming the energy system in the

jurisdictions where we operate.

We support the Paris Agreement’s long-

term goal to keep the rise in global average

temperature by 2100 to well below 2ºC

above pre-industrial levels, and to pursue

efforts to limit the increase to 1.5ºC.

Over the past year, we have operated in

a complex environment of economic and

political uncertainty, with energy security

and affordability remaining key priorities.

As a responsible business, we respond

to these expectations across our

stakeholders. While UK policy continues

to support clean power, affordability and

system resilience are pressing challenges;

in the US, New York faces affordability

challenges and Massachusetts is behind

on key climate targets.

We fully comply with Financial Conduct Authority

(FCA) UK Listing Rule 6.6.6R(8) and align our

climate-related financial disclosures with the TCFD's

four pillars – governance, strategy, risk

management, and metrics and targets, with 11

recommended disclosures under these pillars.

Additionally, we meet the climate-related financial

disclosure requirements outlined in sections 414CA

and 414CB of the Companies Act 2006.

National Grid plc Annual Report and Accounts 2025/26	54	Strategic Report	Corporate Governance	Financial Statements	Additional Information
Task Force on Climate-related Financial Disclosures (TCFD) cont.

Governance

The Board sets and leads the Group’s climate-related

strategy and goals, maintaining oversight of key risks

and opportunities.

Responding to climate change and supporting the

transition to net zero continue to be important

considerations in shaping our strategy. The Board

is responsible for setting the Group’s climate-

related strategy and goals, although delegates

certain responsibilities to its Committees.

Board members bring a blend of skills and

experience, including expertise in delivering

sustainability and climate change strategies. Their

backgrounds and executive experience, particularly

in the energy sector, help ensure the requisite skills

are available to support the Group’s strategy and

monitor climate-related risks and opportunities.

Several Board members, including Tony Wood,

Martha Wyrsch and Earl Shipp, bring strong

climate and sustainability experience. Martha, Chair

of the People & Remuneration Committee,

contributes extensive climate expertise from her

leadership of a major international gas transmission

business and her role in developing Vestas’ US

renewable energy operations. Earl Shipp, Chair of

the Safety & Operations Committee, adds deep

environmental and sustainability knowledge from

his long career in the chemicals industry and

service on the US Federal Reserves Energy

Advisory Committee.

Tony Wood, Chair of the Responsible Business

Committee, provides further sustainability and

climate experience from senior roles in the

aerospace and defence sector, including as CEO

of Meggitt plc where he was responsible for

leading the Group’s sustainability strategy over a

five‑year period. This included overseeing the

development of science‑based targets for Scope 1,

2 and 3 emissions in line with the Science Based

Targets initiative (SBTi). Other Board members

including Paula Rosput Reynolds, Jacqui Ferguson

and Jonathan Silver also bring relevant climate-

related expertise. See pages 91 – 93 for

information on the individual experience of Board

members and page 98 for the Board’s skill profile.

As set out on page 89, the Board Committees

were restructured during the year. As part of the

restructure, the Responsible Business Committee

was established.

The Responsible Business Committee provides

strengthened oversight of sustainability and

climate‑related matters, consolidating

responsibilities that were previously dispersed

across broader Committee remits. It now holds

explicit responsibility for tracking the Group’s

ambition and progress against its sustainability and

climate targets and commitments, meeting three

times during the financial year.

As part of its mandate, the Committee oversees

the Group Principal Risk (GPR) – Climate change

mitigation, reviewing management updates,

assessing risk‑tolerance levels and monitoring the

effectiveness of mitigation strategies.

Climate‑related risks and opportunities remain

integral to the Group’s decision‑making and

oversight. The Committee considers these matters

across strategy, including explicit consideration of

factors such as affordability pressures and fiscal

constraints that may affect the pace of

decarbonisation.

Prior to this change, climate‑related matters were

primarily overseen by the former Safety &

Sustainability Committee, which met for the final

time in May 2025, when the Committee reviewed

progress against Scope 1 and 2 targets, discussed

Scope 3 dependencies, and considered key

external uncertainties, including policy, regulatory,

technological and geopolitical factors.

In September 2025, the Responsible Business

Committee and the Audit & Risk Committee held a

joint meeting to review the Climate Change

Mitigation GPR, including management’s

assessment of the risk against the Board’s risk

appetite and the effectiveness of existing controls

and mitigation actions.

The Committees challenged whether the risk

remained within appetite, noting increasing external

pressures, and considered key risk drivers and

interdependencies, including policy and regulatory

developments, affordability and energy security

considerations. The Committees also reviewed

how climate‑related risks are monitored and

managed, including the use of key risk indicators,

emissions projections and scenario analysis, and

considered emerging risks such as climate‑related

litigation. In addition, the Committees reviewed the

Group’s approach to climate‑related reporting and

disclosures, ensuring that climate risks,

dependencies and uncertainties are appropriately

reflected in external reporting and governance

arrangements.

The Board received three updates from the Chair

of the Responsible Business Committee and one

update from the Chair of the Safety & Sustainability

Committee during the year to provide an overview

of matters discussed at its Committee meetings.

The Board also receives a Chief Executive and

business update report at each meeting which

includes quarterly reporting of climate change

metrics such as GHG emission performance

versus targets.

The Board considered climate‑related themes

across several sessions during the year, including

as part of its strategy‑focused offsite in January

2026, where wider energy transition, system

resilience and long‑term network investment

priorities were discussed alongside affordability and

regulatory considerations. Climate‑related matters

were considered within the context of the Group’s

strategic objectives, recognising the

interdependencies between decarbonisation,

security of supply and customer outcomes.

Prior to the Committee restructure, the People &

Governance Committee reviewed the composition

of the Board and its committees in the year,

applying a Board skills matrix to ensure that the

Board has an appropriate balance of skills and

competencies, including climate change matters.

The Board also considers climate-related issues

when reviewing and guiding annual budgets and

financial decision-making, including major capital

expenditure, acquisitions and divestments.

The remit of the Board and its Committees, as well

as the number of times they met and discussed

climate-related matters during the year, are set out

on pages 89 – 90.

Terms of Reference for the Board and its Committees are available on our website nationalgrid.com/about-us/corporate- information/corporate-governance

National Grid plc Annual Report and Accounts 2025/26	55	Strategic Report	Corporate Governance	Financial Statements	Additional Information
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			Board
	Responsible Business Committee	Audit & Risk Committee	Safety & Operations Committee	People & Remuneration Committee	Nomination Committee
	Responsible for Board oversight of climate‑related matters, including sustainability strategy, climate transition planning, resilience considerations and identification of climate‑related risks and opportunities, in line with the TCFD framework.	Oversees the identification, assessment and management of risks, including internal controls and review of TCFD‑aligned disclosures. Considers climate‑related financial impacts, capital allocation, financing decisions and metrics, and alignment of financial planning with the Group’s transition plan.	Monitors operational safety and resilience, including management of physical climate‑related risks and adaptation measures impacting assets and operations.	Establishes executive remuneration, incentives, skills and succession planning, including LTPP oversight of controllable Scope 1 emissions reductions and energy transformation measures.	Ensures the Board collectively has appropriate skills and experience, covering climate, energy transition and sustainability expertise.
		Group Executive Committee
Responsible Business Committee Oversees Group-wide RBC matters, including political, societal, sustainability and regulatory issues.		Audit, Risk & Finance Committee Manages and coordinates development and delivery of audit, risk and financial activities across the Group, including climate-related principal risks.	Safety & Operations Committee Oversight of safety, heath and wellbeing, asset management and capital projects.	People & Remuneration Committee Sets remuneration and oversees talent, culture, and people risks to support Group strategy.	Group Investment Committee Has delegated authority to approve investment, acquisition and divestment decisions, including ASTI and NY Upstate Upgrade.
			Management forums
Sustainability Delivery Steering Group Drives RBC integration, including climate strategy and targets. Chaired by CSO with attendance from business unit and function senior leaders.		ESG Strategic Steering Group Guides and steers on ESG strategy. Comprised of senior leaders from Sustainability, Finance, Legal and Corporate Affairs.	Sustainability Implementation Group Implements RBC commitments and principles. Monitors climate progress and shares best practice among business peer groups.	Green Financing Committee Chaired by the Group Treasurer, overseeing governance of the programme, including project evaluation for green financing.	Group Sustainability and Finance ESG teams Responsible for the Group’s sustainability strategy and reporting deliverables, ensuring credible and reliable data, including TCFD disclosures.
			Business unit level
	Business units are responsible for delivering the Group’s RBC and CTP. Targets are embedded in performance contracts and progress tracked through our Enterprise Performance Management (EPM) framework. Climate change risks and opportunities are evaluated via the Enterprise Risk Management (ERM) process (see page 30).

Management’s role

The Board delegates responsibility to management for

asset management and maintenance planning,

implementation of the net zero strategy and delivering

climate commitments and targets. This is then

considered at the relevant Group Executive Sub-

Committee. These Sub-Committees were revised in

the year to reflect the Board Committees and enable

more streamlined reporting and clearer accountability

of topics, including sustainability and climate change.

Management is also responsible on a day-to-day

basis for managing climate-related risks and

opportunities, and for reporting on progress to the

Board and its Committees.

Sustainability roles are integrated across the Group

to help ensure a top-down, bottom-up response to

climate. Our Chief Sustainability Officer (CSO) heads

a team of subject matter experts who lead the

implementation of the RBC across the Group,

working closely with business units and functions to

align strategy and operations with decarbonisation

and climate resilience targets.

The team drives the Group’s sustainability strategy,

modelling potential climate scenarios and supporting

the business to develop glidepaths aligned to GHG

emission reduction targets. They also oversee

progress on sustainable supply chain initiatives via

the Supply Chain Climate Strategy Steering Group,

collaborating with representatives from Global

Procurement to develop decarbonisation levers

through supplier engagement.

The Chief Engineer leads on climate adaptation and

mitigation activities, assessing asset climate

vulnerability and guiding investment to strengthen

network resilience. Business unit Presidents are

accountable for delivering net zero commitments.

Group Finance further supports sustainability

ambitions through its ESG Centre of Excellence

(CoE), Investor Relations and Treasury teams. The

ESG CoE sets the Group’s sustainability reporting

strategy, overseeing credible and reliable reporting of

disclosures and ESG rating agency submissions.

Investor Relations and Treasury attract green

investment, engaging with debt and equity investors

to communicate our climate strategy.

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Strategy

Our understanding of climate-related risks and opportunities

informs our strategic decision-making, as we drive

unprecedented levels of investment in energy networks.

The energy transition provides significant growth

opportunities, and we are well-positioned to

harness these, through enabling the transportation

and distribution of clean energy to homes and

businesses. Achieving this requires a major

upgrade of our networks, and we are already

delivering these improvements across the regions

and jurisdictions in which we operate.

We proactively prepare and plan for the physical

and transition risks linked to climate change.

Through scenario planning, we assess a range of

possible futures to understand the opportunities

and risks in each, ensuring our strategy remains

resilient and adaptable. Achieving our emissions

reduction goals will be challenging without backing

from policymakers and regulators.

This section summarises how we are responding

to the main climate-related opportunity facing our

business – the expansion of electricity networks to

support the energy transition – and outlines how

we use scenario modelling to evaluate climate-

related risks and opportunities.

Investing to enable the energy transition

We expect to invest at least £70 billion across our

regulated energy networks and adjacent

businesses, in the UK and US, over the five-year

period to 2030/31. Of this group capital investment,

around 85% is considered to be aligned with the

principles of the EU Taxonomy legislation as at the

date of reporting (also referred to in this report as

green capital expenditure), directly invested into the

decarbonisation of energy networks.

Under our Green Financing Framework 2025,

National Grid plc and its subsidiaries are able to

issue green financing instruments to fund our

efforts towards a cleaner energy system. Moody’s

provided a second party opinion on our updated

Framework published in May 2025 and assigned

an SQS1 sustainability quality score (excellent). See

our latest Green Financing Report on our website,

which details the issuance of green bonds totalling

£1.2 billion in 2025/26, along with the allocation of

proceeds and their environmental impact.

Having considered the climate-related risks and

opportunities on pages 62 – 66, we expect our

strategy and investment drivers to deliver strong

growth (see page 11 for further details). We

continue to focus our business on electricity, with

our most recent projections suggesting that over

80% of Group assets are expected to be electric

by 2030/31.

Growth in clean generation and increased demand

for electricity is driving a need for larger, smarter

electricity networks, alongside ensuring existing

energy networks remain resilient and reliable. We

are connecting more new generation and load

faster than ever before, enabling economic growth,

bolstering energy security and supporting cleaner,

affordable energy for our communities and

customers on both sides of the Atlantic. This is a

significant climate-related financial opportunity, and

key activities we are undertaking to support clean

energy supply and electrification are outlined on

page 44.

As part of our strategy to focus on networks and

streamlining our business, we completed the sale

of National Grid Renewables, our US onshore

renewables business, and Grain LNG, our UK

LNG asset.

In seeking to achieve our net zero target and

support decarbonisation, we will leverage our

strong financial position and investment-grade

credit ratings to finance key investments for net

zero energy transmission and distribution.

Following the successful £7 billion Rights Issue in

2024/25, our balance sheet, backed by valuable

assets and strong credit ratings, is flexible and well

positioned for growth. We secure funding through

borrowing and shareholder investments, adhering

to regulatory rules, and closely monitor the financial

health of our UK and US operations to maintain

appropriate gearing ratios.

As asset growth and earnings become increasingly

aligned, this will support shareholder returns while

preserving balance sheet capacity. Beyond the

next five years, we remain confident in our balance

sheet strength and maintain a broad range of

funding options, including substantial headroom in

hybrid debt capacity, should it be needed.

We, alongside other network companies, have a

unique role to play in supporting system

decarbonisation. By building out the network of the

future, we seek to enable the deployment of low-

carbon energy supply to meet society’s growing

electricity needs while bringing down emissions.

Our Climate Transition Plan, which is aligned with a

1.5°C scenario, identifies the policy and regulatory

support required for future investments aimed at

decarbonising the energy sector and reducing

emissions. For our performance details against the

CTP refer to pages 40 – 44.

Scenario modelling

We use modelling to test how robust our Group

strategy is to a range of future scenarios out to

2050. Our scenarios are used to inform our

sustainability approach and assess progress

against our climate target commitments.

Transition scenario modelling

Our transition scenarios out to 2050 are tailored to

our UK and US business environments.

Our “Delayed” scenario represents a world with

higher warming levels, where governments,

industry and consumers do not pursue the

transition at pace.

Our “Balanced Pathway” scenario sees

approximately 2°C of warming, with the energy

transition progressing at pace but supply chain,

policy and cost challenges preventing our

jurisdictions from hitting targets.

Our “Electric Net Zero” scenario sees

approximately 1.5°C of warming, with governments

and industry prioritising decarbonisation goals

through supportive policies and regulatory reforms.

Our scenarios reflect possible actions and

conditions within our jurisdictions; the associated

°C ranges within our pathway titles are used as

reference labels for external conditions, rather

than implying corresponding global temperature

outcomes, which depend on cumulative

global emissions.

As part of our ongoing risk management processes,

we continually monitor changes in the external

environment and assess implications for our

scenarios. While our modelling is subject to

limitations, including data availability across other

sectors, we mitigate these through the use of diverse

sources and external scenario benchmarking.

Our scenarios are not intended as predictions, but

as tools to enhance our understanding of potential

climate-related risks and opportunities. Along with

our strategic planning and risk management

approaches, these scenarios guide us in identifying

material climate-related risks and opportunities as

set out on pages 62 – 66.

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Transition scenario descriptions, assumptions and inputs

Scenario: Climate change by 2100 vs. pre-industrial levels (approximate)

Scenario	Targets	Macroenvironment and policy	Generation	Demand
Delayed 2-4°C	–Decarbonisation progresses but is insufficient to meet net zero in 2050	–Geopolitics disrupts established trade flows, with supply chain impacts –Policy delays	–Wind and solar deployment continues slowly with thermal generation staying online longer to support load growth –Reduced opportunities for further interconnection growth beyond what is in the pipeline	–Total energy consumption reduces 18% by 2050 –Electricity demand increases 108% by 2050 –Gas heating dominates, with low uptake of heat pumps due to limited policy support –EV uptake stagnates due to cost
Balanced Pathway 2°C	–Decarbonisation progresses but falls short of near-term targets with ~10-year delay to Clean Power 2030	–Geopolitical tensions continue, but with gradual recovery of supply chains –Policy incentives maintained with reforms over time	–Wind and solar deployment continues but misses targets, while gas for the power sector still has a role to play in the 2030s beyond the maximum 5% of power generation targeted in Clean Power 2030 –Interconnector projects progress at pace	–Total energy consumption reduces 31% by 2050 –Electricity demand increases 112% by 2050, mainly because of electrification of heat and transport, green hydrogen production and data centre expansion –Heat pump growth restricted to new build houses. Current houses converting off gas heating continues at current rates –EVs continue to grow at the current rate with the Zero Emissions Vehicles mandate in place
Electric Net Zero 1.5°C	–Delayed achievement of Clean Power 2030, with economy- wide net zero by 2050	–Geopolitical tensions ease, with robust and diversified supply chains and increased international collaboration –Policy progress accelerates and supports increasing investment and target delivery	–Strong renewable expansion supported by distributed flexibility and storage, with some abated gas capacity providing dispatchable supply –Increased collaboration and coordination results in faster adoption of offshore hybrid assets and overall increased interconnectors	–Total energy consumption reduces 32% by 2050, as more efficient electric technology replaces combustion technology –Electricity demand increases 127% by 2050 with near-complete electrification of demand sectors such as heat and transport –Heat pumps mandated in existing homes as well as sufficient subsidy to support wide- spread adoption –Widespread EV adoption as policies achieve targets
Delayed 2-4°C	–Achieves ~50% reduction in energy-related emission from 1990 levels by 2050	–Policy prioritises affordability	–New gas infrastructure to address resource adequacy –No offshore wind added beyond what is fully permitted and currently under construction –Some large onshore renewables are added each decade as states continue to pursue renewable targets but at a delayed pace	–Total energy consumption reduces 22% by 2050 –Electricity demand increases 58% by 2050 –State subsidies are scaled back, resulting in low uptake of heat pumps –EV adoption stagnates in the near term driven by fewer federal incentives, although increases as costs decline in the 2030s
Balanced Pathway 2°C	–Softening in decarbonisation targets, achieves ~60% reduction in energy-related emissions by 2050	–Softening in decarbonisation targets due to affordability concerns	–No new fossil units or major enhancements to existing plant, with limited gas repowering –Offshore wind stalls through 2035, then existing lease areas are gradually built out driven by energy needs, given no politically viable alternatives –Onshore renewables deployment increases steadily but roughly 10 years behind stated policy goals	–Total energy consumption reduces 36% by 2050 –Electricity demand increases 64% by 2050 –Heat pump adoption increases steadily as costs fall, capturing 45% of heat demand by 2050 –Slow adoption of EVs through the 2030s after Federal incentives end in 2025, with full competitiveness and growth upswing by 2035
Electric Net Zero 1.5°C	–Clean electricity targets lag through 2035, but energy- related emissions achieve ~85% reduction in line with overall state emissions targets by 2050	–Policy prioritises clean power and decarbonisation	–Existing gas capacity retained for emergency back-up –New nuclear plays a larger role in decarbonisation –Offshore wind picks up in the 2030s becoming the leading source of electricity generation in the region –Onshore renewables deployment continues to meet the net zero goals	–Total energy consumption reduces 67% by 2050 –Electricity demand increases 78% by 2050 –Heat pump adoption increases with falling costs, capturing 70% of heat demand by 2050 –Widespread EV adoption in line with policy targets

Delayed 2-4°C

Represents a world where governments, industry and consumers do not pursue

the transition at pace, meaning our jurisdictions miss climate targets.

Balanced Pathway 2°C

Energy transition drives forward at pace, but ongoing supply chain challenges,

policy implementation delays, and short-term financial concerns mean our

jurisdictions narrowly miss targets.

Electric Net Zero 1.5°C

Governments prioritise the achievement of decarbonisation goals through

supportive policies and regulatory reforms, new load is met through clean power

sources.

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Transition scenario outputs

		UK	US NY	US MA
Annual electricity demand, TWh	Delayed 2–4°C
	Balanced pathway 2°C
	Electric Net Zero 1.5°C

		US NY			US MA
		2024	2035	2050	2024	2035	2050
Annual natural gas demand, MMBTU	Delayed 2–4°C	815m (2024)	910m	994m	270m (2024)	301m	339m
	Balanced Pathway 2°C	815m (2024)	835m	699m	270m (2024)	270m	220m
	Electric Net Zero 1.5°C	815m (2024)	627m	211m	270m (2024)	196m	65m

Note: Using 2024 data for natural gas demand in New York and Massachusetts, as 2025 data is not yet available.

		UK	US NY	US MA
Total renewable generation, TWh	Delayed 2–4°C
	Balanced Pathway 2°C
	Electric Net Zero 1.5°C

	2025: 1.1	2035: 2.2	2050: 2.1	Total: 5.4
3.2

		UK	US NY	US MA
Number of passenger EVs, millions	Delayed 2–4°C
		93% of car fleet by 2050	70% of car fleet by 2050	70% of car fleet by 2050
	Balanced Pathway 2°C
		96% of car fleet by 2050	70% of car fleet by 2050	70% of car fleet by 2050
	Electric Net Zero 1.5°C
		100% of car fleet by 2050	87% of car fleet by 2050	88% of car fleet by 2050

		UK	US NY	US MA
Number of residential heat pumps, millions	Delayed 2–4°C
	Balanced pathway 2°C
	Electric Net Zero 1.5°C

2024: 0.08 2035: 0.35 2050: 0.49 Total: 0.92

2.3

0.68

	2025		2035		2050	Note: NY refers to New York State, MA to Massachusetts. UK Delayed and Electric Net Zero scenarios based on 2024/25 inputs. US NY Heat Pump numbers are based on 2024 data as 2025 data is not yet available.

Note: Graphics are not to scale.

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Changes since last year

We have retained our scenario framework from last

year, which presents a wide range of energy

transition outcomes. They reflect the tensions or

trade-offs governments may need to manage. We

regularly update our Balanced Pathway scenarios

for the US and UK. Our Electric Net Zero and

Delayed scenarios are long-term outlooks and we

do not update them as frequently. The inputs for

our US Delayed and Electric Net Zero scenarios

have been updated since last year to reflect

market, policy and technology shifts, while the UK

Delayed and Electric Net Zero scenarios remain

consistent with our 2024/25 Annual Report. We will

continue to monitor the evolving market, policy and

technology landscape and consider any revisions

to our UK Delayed and Electric Net Zero scenarios

as appropriate.

Transition scenario insights

We assess the resilience of our business strategy

against our transition scenarios, with a particular

focus on the Electric Net Zero scenario, given

the greater level of action required to deliver

decarbonised energy systems. The following

five transition insights are most relevant to a

1.5°C scenario.

1. Achieving energy transition targets

depends on effective reforms to drive clean

power deployment and policies that

incentivise consumer uptake of low-carbon

technologies

Policy interventions will continue to be a key

enabler of the transition. Our ability to meet our

own climate commitments relies on these.

Government support for both supply-side and

demand-side clean technologies is important to

achieve policy targets. This extends to key enabling

policies regarding connections, planning and

permitting, as necessary preconditions for our

jurisdictions to accelerate in line with targets.

Without additional support, despite technology

cost declines, there will be a financing gap for

some clean technologies.

2. Electricity use and share of final demand

will increase driven by consumer

electrification and large demand customer

growth (e.g. data centres)

As more consumers switch to electric vehicles and

heat pumps, electricity demand will increase. Rapid

growth of data centres and the rise of AI, alongside

industrial electrification, is a potentially significant

additional driver of demand. In the UK, we expect

electricity demand to increase 50% by 2035 and

more than double by 2050. In our states in the US,

we expect an increase of around 30% by 2035 and

more than 50% by 2050. These projections could

increase if the pace of electrification accelerates,

with the growth of AI and associated power needs

a key variable. Rising electrification will continue to

drive additional growth and investment in our

electricity network.

3. Energy supply structure will continue

to shift

Renewable capacity will continue to grow globally,

to meet electricity demand growth and replace

fossil fuel generation. Other low-carbon

technologies are also seeing a resurgence in

growth, including nuclear, with growing momentum

for next generation technologies such as small

modular reactors. Battery storage capacity and

other flexible assets continue to advance, with

some technologies already commercially scalable,

and supporting system balancing and curtailment.

4. Pathways will adapt to global and

local realities

Our governments continue to actively shape energy

policy, and we expect to see different energy

transition pathways across our jurisdictions. In the

UK, the Government has continued to drive

progress towards its Clean Power 2030 Action

Plan, breaking further records in recent renewable

auctions. In the US, the Federal Government

remains focused on energy abundance, through

natural gas and expanding energy infrastructure.

Our states continue to pursue climate targets and

policies, while seeking to balance these with other

priorities including affordability.

5. CTP achievement will be challenging in

slower scenarios

Our ability to achieve our climate targets is closely

linked to the decarbonisation of the energy

systems in the jurisdictions in which we operate.

We have always viewed our climate targets as

ambitious, and meeting our targets is contingent

on a range of dependencies. Slower scenarios

present greater challenges to meeting our targets,

and in some we will not be able to meet our

targets. Moving forward, we will continue to evolve

and refine our approach based on progress and

developments in the external landscape.

Conclusion

None of the transition scenarios tested

materially threaten the Group's resilience,

and we are well positioned to adapt our

portfolio to maximise the opportunities of

the energy transition, with no significant risk

of a material adjustment to the carrying

amounts of assets and liabilities in the next

annual reporting period.

Further detail on the transition risks and opportunities identified in our scenario analysis, including estimated qualitative and quantitative impacts where applicable, can be found on pages 62 – 66.

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Physical scenario modelling

We use Group-wide climate scenarios to assess

our vulnerability to climate change. These scenarios

benchmark global progress toward limiting warming

to 1.5°C in line with the Paris Agreement and

evaluate how physical climate impacts – such as

extreme weather and long-term changes in weather

patterns – could affect our business.

Descriptions, assumptions and inputs

Climate hazard data is sourced from national

climate assessments in the UK (UKCP18) and US

(CMIP5). Scenario modelling uses the

Intergovernmental Panel on Climate Change

(IPCC’s) Representative Concentration Pathway

(RCP) of RCP8.5 (4°C) and RCP4.5 (2°C) across

future decades (2030s–2070s), compared with

1981–2010 (UK) and 1976–2005 (US) baselines.

While climate projections are inherently uncertain –

due to natural variability, model limits, and imperfect

observations – these uncertainties should not delay

action to mitigate or adapt to climate change.

Outputs

Most climate hazards are expected to become

more frequent, with high temperatures and coastal

and river flooding posing the greatest risk across

our operations. Risks are generally higher in a 4°C

scenario than a 2°C scenario.

Wildfire risk remains lower in our territories

compared with areas such as the western US, but

we have strengthened situational awareness and

operating procedures. We recently completed a

third-party wildfire risk assessment for our US

jurisdictions and are in the process of initiating one

in the UK, helping us identify vulnerabilities and

develop mitigations.

We have advanced our physical risk analysis to

guide strategic planning and investment. Our

Climate Change Risk Tool (CCRT) uses geospatial

capability to provide tailored physical risk

assessments for each mapped business area while

still maintaining a Group-level view. We aspire to

further develop the CCRT to account for portfolio

changes and incorporate additional infrastructure

data points in areas like NGED, NGV and SI to

refine our overall risk picture.

Climate Vulnerability Assessment (CVA)

Using CCRT insights, we conduct a Group-wide

Climate Vulnerability Assessment (CVA) to evaluate

how climate change could affect our assets over

the coming decades. This is typically performed on

a five-year basis, and we anticipate completing the

next Group-wide CVA in 2028.

Understanding changing climate conditions and

asset risk allows us to develop appropriate

mitigations to protect existing assets and build

climate resiliency. The CVA follows a phased risk-

based approach to identify high-risk assets and

develop adaptation plans. Outputs of the CVA

process include business-specific vulnerability

assessment reports, equipment specification

updates, external engineering standards, asset

policy changes, discrete investment projects and

CCRT development.

Each business unit identifies critical assets

vulnerable to climate hazards, accounting for

existing adaptation measures and the latest climate

science. Adaptations are locally developed to inform

standards, capital investment, and broader industry

alignment. Given that many of our assets have

lifespans of 50+ years, future climate hazards must

be considered upfront in planning to avoid

premature asset repair or replacement. For

example, a site not currently at risk of coastal

flooding may become vulnerable within a decade

based on climate projections. Understanding future

climate hazards allows us to make informed design

decisions and resiliency investments to protect our

Group’s assets and improve reliability for customers.

The Climate Resilience Working Group is attended

by representatives from across our business units

who meet monthly to discuss best practice,

particularly related to climate assessments and

response. Additional detail on our actions to

anticipate and respond to climate-related

disruptions is on page 35 and information on

business unit level assessments is on page 66.

The climate hazards most significant to us are summarised below.

Group-level critical climate risks		Vulnerability
	High temperatures and heatwaves	Risk of power failure, equipment overheating, warmer air temperatures contributing toward accelerated ageing, reduced capacity of transmission and distribution lines.
	Cold weather	Ice accretion overloading overhead lines, structural failure.
	Lightning	Risk of power failure, short-circuit faults, and equipment deterioration.
	Flooding/Erosion	Risk of power failure, accelerated asset corrosion, debris damage, equipment submersion and water infiltration, soil erosion.
	Extreme wind	Structural failure to overhead lines due to extreme wind exceeding design standard and vegetation contact.
	Risk descriptions
	Chronic physical risk Gradual, persistent impact over a longer sustained period	Acute physical risk Immediate, high-severity impact concentrated in a short period

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Task Force on Climate-related Financial Disclosures (TCFD) cont.

Risk Management

Climate change is fully integrated into our

enterprise risk management framework.

Climate change and ERM

Climate change is a key Group risk factor and is

fully integrated into our enterprise risk management

framework. We consider both physical and

transition risks, and their potential impact on our

business operations, financial performance, and

reputation. For more information on our ERM

framework, which remains consistent with the prior

year, please refer to page 30.

We manage two climate-related Group Principal

Risks (GPR):

1.Climate change (mitigation GPR): This risk

aligns to the strategic objective Enable the

energy transition for all, with a focus on

delivering clean, decarbonised energy to meet

our net zero goals (refer to page 33).

2.Loss of supply1 (adaptation GPR): Physical

climate risks are incorporated into the Loss of

supply control framework to support system

resilience and the safe, reliable delivery of energy

(refer to page 35).

This structure provides clear oversight and

accountability – mitigating risk, and maximising

opportunities – in line with Group risk appetite.

1.Significant disruption of energy was renamed to Loss of supply

during 2025/26 to better reflect the nature of the risk, and reflect

that upstream supply considerations are included as a key cause.

Other GPRs affected by climate-related transition

and physical risks include Major capital

programmes which become more significant in a

1.5°C scenario, requiring proactive management

and intervention. Physical risks also contribute to

our Significant safety or environmental event risk,

reinforcing the need for robust safety and

environmental disciplines. Acute physical risks are

already occurring and are expected to increase in

frequency and severity, with greater long-term

impacts under a 4°C scenario.

We routinely horizon scan and track critical energy

transition trends. We monitor key indicators and

metrics against established thresholds and assess

these against our strategy and business plans.

Emerging risks are identified and managed through

our ERM processes with outcomes shared,

reviewed and challenged by senior leadership (refer

to page 30).

Climate-related risk management is embedded

across all levels of the organisation and follows the

Group’s established “Three Lines” model (see page

30).

Group Risk Taxonomy

The Group Risk Taxonomy enables the business to

classify any climate change risk under four

categories – strategic, operational, financial, and

compliance – with more detailed sub-categories

and assigned risk appetites. All GPRs are subject

to a detailed annual review and treated as equally

important and not prioritised.

Despite external pressures, our climate-related risk

exposure remains broadly stable, with most risks

within appetite. These risks primarily fall under our

strategic and operational categories.

How we manage and monitor our

climate-related risks

As part of our risk management process, we have

defined key controls to manage both climate

change mitigation and adaptation risks.

Mitigation controls align with our strategy and

regulatory frameworks and extend across other

relevant risks such as regulatory outcomes, political

and societal expectations, and loss of supply.

These key controls focus on tracking progress

against targets, identifying transition-risk triggers,

and implementing appropriate actions and

solutions. Our material climate change mitigation

controls include the following:

–Business unit action plans: These are

designed to ensure each business unit can

deliver climate change goals to support the

delivery of Group emission reduction targets in

line with our vision and strategy.

–Governance: Our top-down, bottom-up

approach to sustainability governance across all

levels of the organisation (described on page 54)

drives performance and holds business units to

account.

–Responsible Business reporting: We annually

report on our performance, transparently

documenting progress and dependencies

against our commitments.

Assessing our climate-related financial

risks and opportunities

Our GPRs are rated on a scale of 1 to 5 across

financial, reputational, and likelihood categories.

Financial ratings reflect increasing monetary

impact, while reputational ratings range from

“internal” to “international”.

The overall indicative risk score is calculated by

multiplying likelihood by the greater of financial or

reputational impact, consistent with the stress-

testing methodology used for our Viability

Statement (page 86).

For TCFD disclosures, we build on this internal

assessment of impact, timeframe and likelihood by

incorporating market data and insights from

subject matter experts across the Group. Short-

term time horizons consider the current effects of

climate-related risks and opportunities while

medium- to long-term consider the

anticipated effects.

We assess material climate-related risks and

opportunities over short, medium, and long-term

horizons, aligned with strategic business planning,

investment and financial forecasting processes.

Conclusion

Our financially material climate-related risks

and opportunities, along with how we

measure and respond to them, are outlined

on the following pages.

Across all pathways, including worst-case

scenarios, none of the identified risks

undermine the Group’s resilience.

We remain well-positioned to adapt our

portfolio and respond to opportunities from

the energy transition.

Reducing uncertainty for uncontrollable

risks through building resilience into

operations and influencing regulatory

outcomes remains essential.

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Task Force on Climate-related Financial Disclosures (TCFD) cont. Risk Management

1. Transition Risk

Demand for natural gas is uncertain in long-term scenarios
Risk/opportunity Policy and legal Gas is expected to continue to play an important role across our US jurisdictions, including the gas assets we own and operate today. However, achieving net zero will require progressive decarbonisation of energy networks over the long term, with the future role of gas shaped by economic, technological, legal, policy and regulatory developments. Over the next decade, natural gas demand is expected to remain robust, reflecting affordability and regional economic priorities. Over the longer term, net zero pathways assume increased electrification, including for heating, which would raise electricity demand and reduce gas consumption, with implications for the useful economic lives (UELs) and elements of our gas network assets.
	Business units potentially affected: NY and NE
	Asset group(s) potentially affected: Gas Distribution and Generation
	Timeframe
	Likelihood
	Measurement indicators: –Gas UEL sensitivities –GHG emissions –CTP

Potential impact

Massachusetts and New York are pursuing accelerated

decarbonisation pathways centred on electrification, which may

reduce long‑term demand for gas heating and shorten the UELs of

certain gas network assets as policy, regulatory and planning

frameworks evolve. Current regulatory frameworks continue to

support capital investment, cost recovery and returns for gas

networks to maintain a safe and reliable service, and while new

customer connections may be constrained, there are no regulatory

mandates requiring the forced conversion of existing gas customers.

State net zero pathways assume a rapid near‑term acceleration in

heat pump adoption, which is a key indicator of electrification and

future gas demand. Achieving material reductions in gas reliance

would also require significant investment in supporting electric

infrastructure. However, recent setbacks to renewable energy

development have increased delivery risk in Massachusetts and New

York. The transition scenario outputs summary on page 30 illustrates

the KPIs relative to the accelerated deployment required under

forecast transition scenarios.

More frequent cold weather events across New York and

Massachusetts underscore the importance of resilient energy

infrastructure. Given the likelihood of recurring extreme cold weather,

many customers are expected to adopt partial electrification

solutions, retaining gas connections for reliability and backup.

Full electrification scenarios appear challenging due to high costs,

customers opting for gas, and existing challenges on the electric

infrastructure to support increasing load in the short term.

We have performed sensitivity analysis to assess the impact on our

Short

Medium

Long

Group financial results of shortening the UELs of our gas business

assets, which for 2050 illustrates an unlikely worst-case scenario.

Please refer to note 13 Property, plant and equipment for more

Very Low

Low

Moderate

High

Very High

details.

Our response

We support the decarbonisation of energy networks while

recognising that gas is expected to continue to play an important,

though evolving, role over the medium to long term, including

through our existing gas assets, with its future role beyond 2050

dependent on economic, technological, legal and regulatory

developments. In assessing the UEL of these assets, we consider

multiple demand pathways reflecting customer behaviour,

electrification pace and affordability, the potential role of low‑carbon

fuels, and jurisdictional net zero ambitions, noting that while New

York and Massachusetts prioritise large‑scale electrification,

challenges remain in meeting near‑term targets.

Notwithstanding long‑term policy objectives, safety and reliability of

the gas network remain key priorities for both National Grid and

regulators. This is evidenced by continued regulatory support for

targeted gas infrastructure investment, including approval of cost

recovery and allowed returns where investment is required to

maintain safe and reliable service. On 7 November 2025, the New

York Department of Environmental Conservation approved permits

for the Northeast Supply Enhancement (NESE) pipeline, which, while

not Company‑owned, will supply gas solely to National Grid and has

been incorporated into our long‑term planning assumptions. The

December 2025 adoption of the New York State Energy Plan further

signals ongoing regulatory recognition of the role of gas infrastructure

in meeting system reliability and policy objectives.

Alternative pathways considered in regulatory proceedings could

also support continued use of gas assets, including as a back‑up

fuel during peak winter demand or through lower‑carbon fuels. Our

US fossil‑fuelled generation assets are currently expected to be

materially depreciated by 2040, aligning with New York State’s

zero‑emissions electricity target. However, due to system reliability

needs, fossil-fuel generation assets may continue to operate beyond

2040. During recent extreme weather events, these assets provided

critical system reliability, including increased steam generation during

a winter cold snap and record daily output at the Northport plant

during a late-June heatwave. As such events become more

frequent, existing assets can continue to support grid resilience and

climate adaptation.

Time horizons:			Likelihood:
The timeframes we have used to assess the climate-related risks and opportunities are:			Our likelihood assessment is an indicative estimate of the probability for material financial impacts with reference to the following categorisation:
Up to one year In line with our annual planning and shorter-term budget process.	From two to ten years Reflects our strategic business planning process period.	Ten years plus Aligns with our longer-term emerging risk assessment timelines, up to the date of our net zero commitment.	We use our ERM risk assessment scoring scale to categorise the likelihood of our climate change risks and opportunities.
These time horizons largely align with our planning and forecasting process timelines, with some buffers to reflect the regularity of updating scenarios.

Very Low

Low

Moderate

High

Very High

Short

Medium

Long

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2. Transition Risk

Uncertainty in the extent of electricity demand growth
Risk/opportunity Market, policy and legal Electricity demand growth is projected in all scenarios, but there is uncertainty about the pace and scale of this growth. A wide range of factors may influence the trajectory, including political, technological and market trends, and associated rates of consumer adoption. AI adoption is forecast to drive electricity load growth, with data centres already a major contributor to growth in connection demand queues, but there remains uncertainty including scale of adoption and location. Electricity demand growth is a key driver of long-term network planning. This is further complicated by the growth of embedded generation and flexibility.
	Business units potentially affected: All
	Asset group(s) potentially affected: Electrical Distribution and Transmission
	Timeframe
	Likelihood
	Measurement indicators: –Network reliability –UK and US power networks –Capital investment

Short

Medium

Long

Very Low

Low

Moderate

High

Very High

Potential impact

It is important to accurately forecast demand to right-size the networks

of the future.

If electricity demand is underestimated, there is a risk that the electricity

transmission and distribution networks we operate may not be able to

accommodate the scale of demand growth required to support the

energy transition. This could result in National Grid slowing the pace of

electrification and potentially affect both the reliability of our services

and the delivery of our sustainability objectives, with financial and

reputational risks.

If electricity demand is overestimated, there is a risk of over‑investment

in network assets, increasing energy system costs at a time when

consumer affordability is strained. This would undermine the trust and

confidence of both consumers and regulators, potentially damaging our

reputation and credibility in the market.

Given this two-way risk would likely materialise over the medium to long

term, it is not possible to reliably quantify this risk at this time.

Our response

It is important that governments continue to set clear policy

commitments to provide strategic direction to National Grid

and the wider industry. System planners and regulators play

important roles in providing independent assessments of demand

growth, and we continue to work closely with them to ensure our

plans are flexible and responsive to changing needs. We

undertake our own internal analysis, based on decades of

experience in energy infrastructure development, to model

different futures with varying electric demand growth. This is

supported by close stakeholder relationships across wider

industry and government.

In the UK, NESO has a central role in the strategic planning of

Great Britain’s energy system. Given the scale of electricity

demand growth, we are delivering no-regret anticipatory

investment to future-proof the network. In UK ET, we are making

good progress through the ASTI regime created by Ofgem, and

have integrated anticipatory approaches into our RIIO-T3 plan.

Ofgem’s RIIO-T3 Final Determinations include mechanisms to

respond to projects that may be required by NESO’s Centralised

Strategic Network Plan. We are developing our business plan for

RIIO-ED3, with tools and mechanisms to address uncertainty. Our

DSO governance panel plays an important role in providing

rigorous, independent challenge to our plans.

In the US, investment is prioritised based on system performance,

engineering needs, and execution strategy, and we continue to

deliver efficient solutions to enable electricity demand growth such

as energy efficiency, demand response, and other non‑wires

alternatives. We regularly measure and report our network

reliability across the transmission, distribution and interconnection

network (refer to page 28).

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3. Transition Risk

There are several dependencies which affect our ability to deliver our commitments, including supply chain, talent and finance
Risk/opportunity Reputation and market We are playing our role in delivering an unprecedented transformation of energy systems, with associated delivery risks across areas within our strategic influence. These areas primarily include, but are not limited to, supply chains, workforce capability and access to capital. Our energy networks are critical to enable the flows of energy from cleaner generation to decarbonised demand, and delays to delivery could jeopardise wider societal decarbonisation goals. Assuming broader supportive and aligned external conditions exist, such as political, regulatory and technological, failure to effectively execute within areas under National Grid’s strategic influence could result in reputational harm and market consequences. There may be reputational and market impacts if we fall short of our own ambitious GHG emissions targets.
	Business units potentially affected: All
	Asset group(s) potentially affected: Electrical Distribution and Transmission, Gas Distribution
	Timeframe
	Likelihood
	Measurement indicators: –GHG emissions –Network reliability –Proportion of renewables in energy mix –Customer satisfaction (US) –Cumulative green bonds on issue –Capital investment –Supply chain engagement –Employee engagement index

Potential impact

The external context in which we operate has evolved significantly,

particularly across political and regulatory frameworks, technological

developments, affordability considerations, and customer expectations.

While these broader factors are captured within our Group Principal

Risks, this transition risk scenario focuses on the potential reputational

and market consequences arising from our execution across areas

under National Grid’s strategic influence. Assuming supportive external

conditions, ineffective delivery could adversely affect stakeholder

confidence, with implications for investors, regulators and other key

stakeholders. Further detail on Group Principal Risks and related

management actions is provided on pages 32 – 37.

Our businesses in the US and UK both depend on, and compete in, a

global market for materials and equipment, talent and green finance. To

deliver at the pace and scale required, we need to purchase

equipment, including assets with long lead times and constrained

global supply in the right timeframes. We also need to compete

effectively for talent, to deliver significant network reinforcement as well

as maintaining a robust and reliable network. Attracting investment

underpins our ability to deliver this reinforcement. It is crucial that we

have investable regulatory frameworks with the right return on and of

capital. These regulatory frameworks include incentives and penalties.

Our supply chain, talent and financing need to operate in conjunction

to successfully deliver investments, and failure could result in

materially lower financial performance, impacting our share price and

EPS projections. It could also damage our relationships with our

trusted stakeholders, including our investors, regulators and

customers, and potentially position National Grid as an obstacle rather

than an enabler in the energy transition. The wider economy is

dependent on the energy sector to enable their decarbonisation plans,

with the ability to connect to our transmission and distribution

networks in a timely manner.

Short

Medium

Long

Given this risk would likely materialise over the medium to long term, it

is not possible to reliably quantify this risk at this time.

Very Low

Low

Moderate

High

Very High

Our response

Climate-related targets are embedded into our internal performance

management and incentives, maintaining our focus on ensuring the

supply chain, talent and financing is in place to deliver on our

commitments. The Responsible Business section (pages 40 – 44)

sets out our progress against our Group CTP – our roadmap to a

vision of reaching net zero. We continue to work closely with

stakeholders, including regulators, to ensure policy and regulatory

frameworks enable and facilitate our net zero plans.

We continue to deliver transformative new approaches to strengthen

our supply chains. In the UK, building on pioneering initiatives

including the Great Grid Partnership, in July 2025 we launched our c.

£8bn Electricity Transmission Partnership to unlock long-term supply

chain capacity and skills. In New England, we have established

strategic contractor partnerships to accelerate timelines, reduce risk,

and lower costs across over $3 billion of planned capital work over

the next five years. We also engage with our suppliers to establish

action plans and commitments towards a Science Based Target

(refer to page 42).

We have a strategic priority to ‘build tomorrow’s workforce today’ to

develop the skills we need to deliver on our ambitions. We continue to

deliver strong entry level programmes for graduates, interns and

apprentices, as well as proactively investing in leadership

development. In 2026, we expanded our Construction Development

Programme to include a Development Engineer Pathway aimed at

individuals looking to re-skill and transition into the network

development space within our Electricity Transmission business, and

we launched Leading @ Grid, a global development programme to

enhance senior leadership capabilities.

We work closely with regulators to get investable frameworks in place

in all our jurisdictions, with the acceptance of the RIIO-T3 regulatory

framework a significant milestone in March 2026. Our upgraded five-

year financial framework provides a clear investor proposition,

including an upgraded EPS.

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Task Force on Climate-related Financial Disclosures (TCFD) cont. Risk Management

4. Transition Opportunity

Growth of clean generation and increased demand for electricity, even in our slowest decarbonising scenarios
Risk/opportunity Market Renewable generation projects are reorienting our system design, with power flowing from new locations across our networks. Electrification of heat and transport, alongside growing business electricity demand, such as data centres, offers significant growth opportunities in the UK and US. National Grid is well positioned to capitalise on these opportunities through our central role in connecting new sources of energy to end users via our networks. Products and services The evolution of the energy system will require innovative solutions to deliver expanded and decarbonised electricity networks, with National Grid leading the way to scale these technologies, benefitting our business and consumers.
	Business units potentially affected: All
	Asset group(s) potentially affected: Electrical Distribution and Transmission, NGV Interconnectors and NGP investment
	Timeframe
	Likelihood
	Measurement indicators: –Network efficiency and reliability –Renewable capacity additions –Proportion of renewables in energy mix –EU Taxonomy green capital expenditure –Investment in research and development –National Grid Partners investment

Potential impact

While the pace and scale of electrification growth is uncertain, the

positive trajectory is clear, driving growth in electricity networks.

In the UK, the Government is supporting continued momentum towards

its Clean Power 2030 Plan. Supply-side objectives are intertwined with

ambition for uptake of decarbonised customer technologies including

electric vehicles, heat pumps, embedded generation and storage. In the

US, our states have established targets for clean energy supply and

consumer electrification. The drive to cleaner energy in our jurisdictions

requires the infrastructure to deliver it, underpinning our new five-year

financial framework with cumulative capital investment of at least £70

billion.

Alongside expanding networks in our jurisdictions, we will need greater

interconnectivity to match intermittent renewable generation to

increased electricity demand.

Our response

To maximise these opportunities, we are delivering on our strategy to

focus on networks and streamlining our business. In May 2025, we

completed the sale of National Grid Renewables, our US onshore

renewables business. In November 2025 we completed the sale of

Grain LNG, our UK LNG asset. Our recently upgraded five-year

financial framework projects capital investment of at least £70 billion

across our energy networks from 2027 to 2031. This investment

continues the Group’s shift towards electric, with latest projections

forecasting over 80% of Group assets will be electric by 2030/31.

In the UK, we are leading the largest overhaul of the electricity grid in

a generation, doubling our investment in UK electricity networks

relative to the previous five years. We expect to invest £31 billion in

the next five years to 2030/31 in UK ET. Ofgem's Final Determination

delivers a price control (running from 1 April 2026 to 31 March 2031)

Short

Medium

Long

that enables networks to invest at the pace and scale needed to

meet the ramp up in power demand, with plans to nearly double the

amount of power that can flow across the country. This will help

Very Low

Low

Moderate

High

Very High

avoid constraint costs and ensure a resilient, clean and future-

proofed network that will be critical to underpinning economic

competitiveness and growth in the UK in the years ahead.

For UK ED, we expect to invest £9 billion in the next five years. We

continue to deliver against our RIIO-ED2 business plan (ED2 price

control period runs from 1 April 2023 to 31 March 2028), to ensure

the readiness of the electricity network to unlock the potential for

customers to electrify further and faster. We’ll continue to engage

customers and stakeholders as we refine and get ready to submit

our RIIO-ED3 business plan to Ofgem in December 2026 for the

ED3 price control period, which will run from 1 April 2028 to

31 March 2033. ED3 will be a critical period in transforming

electricity distribution networks to achieve the UK's climate targets.

In the US, our well-developed energy transition scenarios have enabled

us to submit credible rate case filings outlining the investments needed

to deliver the energy transition. As part of our five-year financial

framework to 2031, we expect to invest around £17 billion and £12

billion in our New York and New England regulated businesses

respectively. In New York, we continue to make significant progress

on the $4 billion Upstate Upgrade programme, to deliver a smarter,

stronger and cleaner energy grid. Our NIMO rate settlement for 2025

to 2028 was approved in August 2025, including investments to

integrate renewables and reduce emissions from gas leaks. In New

England, we secured approval for the cost recovery mechanism for

our nearly $600 million Electric Sector Modernization Plan, balancing

customer affordability with the state’s clean energy objectives. Gas

has a foundational role in Massachusetts’ all-of-the-above energy

strategy. In January 2026, we submitted our rate case filing for

Massachusetts Gas. These activities further enhance our role in

delivering the energy transition, while helping to ensure energy

security and sustainable affordability in the regions we operate in.

Our NGV business has planned capital investment of around £1 billion

out to 2031. NGV is a leader in developing electricity interconnector

projects to connect Great Britain with other European countries. By

enabling cross-border electricity trade, interconnectors can displace

fossil fuel generation in favour of renewable energy, reducing the CO2e

intensity of the energy mix, while generating revenue. Our current

portfolio of six interconnectors provide 7.8 GW of capacity, allowing

us to trade excess power –  including renewable energy generated

from the sun, wind and water – between different countries, and we

estimate that by 2030, 90% of the energy imported via our

interconnectors will be from zero‑carbon sources. We are working

towards expanding our portfolio of interconnectors, including LionLink,

a first-of-its-kind interconnector connecting offshore wind to Great Britain

and the Netherlands’ electricity grids, and GriffinLink, a new

multi-purpose interconnector project in partnership with TenneT

Germany. In the US, NGV continues to develop opportunities, including

its announcement in 2025 that it will install the world’s first 100%

hydrogen fuelled commercial linear generator at Northport power plant.

Our corporate venture capital arm, National Grid Partners, continues

to invest in startups at the intersection of energy and emerging

technology, allowing National Grid to benefit operationally and

strategically as we scale them across our business and industry. Since

its founding in 2018, National Grid Partners has invested more than

$550 million in startups advancing the future of energy; and it recently

committed another $100 million to artificial intelligence startups

supporting a smarter, more resilient grid and boosting energy security.

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5. Physical Risk

Increased frequency of extreme weather events and long-term shifts in global climate patterns
Risk/opportunity Acute Our assets are at risk of physical impacts from increased frequency of extreme weather events such as storms and flooding, leading to asset damage and operational risks. Chronic Our assets are at risk of physical impacts from changing climate trends in the longer term, including increased frequency and severity of coastal flooding, high temperatures, extreme wind, wildfires and low temperature, exposing us to asset damage and operational risks.
	Business units potentially affected: All
	Asset group(s) potentially affected: Electrical Distribution and Transmission, Gas Distribution
	Timeframe
	Likelihood
	Measurement indicators: –Network reliability –Major storm costs –CCRT outputs –Research outputs from innovation projects –EU Taxonomy climate adaptation capital expenditure

Potential impact

Under our US regulatory frameworks, major storm-related costs

become recoverable in future years once deferrable criteria are met. In

2025/26, we incurred deferrable storm costs (net of allowances) which

are eligible for future recovery of £39 million, but this did not exceed our

pre-set $100 million threshold to be excluded from underlying results.

In the prior year, we incurred £87 million of deferrable storm costs (net

of allowances) and consequently these were all excluded from our

reported underlying results. Further details are provided on pages 71

and 73. Cost recovery for other US weather-related events is included

within the base rates set at the outset of each rate filing period.

In the UK, storm costs above predefined thresholds can be recovered

through re-opener mechanisms within our price control frameworks,

allowing adjustments to allowed revenues for severe weather-related

expenditure.

At the end of 2023, Niagara Mohawk Power Corporation (NIMO)

submitted its Climate Change Resilience Plan (CCRP) to the New York

Public Service Commission (NYPSC), assessing the vulnerability of its

electric infrastructure to climate-related risks. The study identified a

capital investment of approximately $243 million in resilience

programmes over a five-year period (2026-2030), with cumulative

investments projected to reach about $566 million by the tenth year

(2026-2035) and $1.39 billion by the twentieth year (2026-2045). The

revenue requirements for these resilience investments are expected to

result in total bill increases of 0.02% in 2025/26 to 0.66% in 2029/30

compared to current rates across all service classes.

Subsequent modifications to the CCRP were submitted in December

Short

Medium

Long

2024 with an updated filing in February 2025. The CCRP programme

timelines and budgets were revised following the NMPC FY26-28 rate

case, with several projects deferred to support customer affordability.

Very Low

Low

Moderate

High

Very High

As a result, the FY26-30 CCRP budget was reduced from $243 million

to $110 million.

Weather-related events are likely to become more frequent in line with

the increasing likelihoods illustrated by the IPCC. Costs are expected to

grow accordingly, including potential rises to insurance premiums to

cover such events, unless climate adaptation is appropriately

implemented.

Our response

Our Group-wide CVA leverages CCRT data analysis to identify

long-term climate hazard risks to our energy infrastructure. We are

utilising our findings to develop tailored climate change adaptation

plans across our business.

In Massachusetts, efforts to produce a climate change resilience

plan commenced in 2025 with collaboration among Massachusetts

utilities and the state’s Office of Climate Science. This plan, due to

state regulators in September 2029, will identify specific mitigation

actions across the state. While this plan is developed, we continue

to address substation flood mitigation concerns at substations where

flooding is identified as a risk. These resiliency projects total $98.5

million and form part of the recently approved MECO rate case. We

also continue to accelerate the installation of Fault Location Isolation

and Restoration (FLISR) schemes to improve reliability and resiliency

during storms across both New York and New England.

In the UK, ED responded to Ofgem’s Sector Specific Methodology

Consultation (SSMC) which included dedicated climate resiliency

questions linked to the ED3 price control framework.

In addition, as part of our UK ET T3 business plan, we submitted

a RIIO-T3 Climate Resilience Strategy as an annex to the main

business plan submission.

We continue to invest in climate adaptation across the Group in

the form of storm hardening and flood defences, with a further

£79 million (2024/25: £57 million) invested in the year. Such

investments should increase our ability to withstand disruptive

events, and improve our organisational capability to reduce the

magnitude and impact from such events.

National Grid plc Annual Report and Accounts 2025/26	67	Strategic Report	Corporate Governance	Financial Statements	Additional Information
Task Force on Climate-related Financial Disclosures (TCFD) cont.

Metrics

and Targets

We disclose our GHG emissions metrics through our

Responsible Business reporting, tracking performance

and material climate change risks and opportunities.

Our approach to setting, reviewing and monitoring

climate‑related targets is embedded in our Climate

change mitigation GPR on page 35, which outlines

how we assess and manage the actual and

potential impacts of climate change. Progress

against each target is monitored using defined

quantitative indicators, with performance reviewed

through established risk management and

governance processes.

Our greenhouse gas (GHG) emission reduction

targets and other climate-related metrics are

summarised on page 68, with performance analysis

(including trends and year‑on‑year movements)

provided in the KPI section on page 27 and the

Responsible Business review on page 40. The

Responsible Business review also includes

additional metrics and targets used by us to assess

and manage relevant climate-related risks and

opportunities. We also disclose industry‑based

metrics relevant to our business model and

activities, and reflected in our SASB‑aligned

reporting on our website which helps inform our

Responsible Business commitments.

Our emissions reduction targets have been

informed by the objectives of the Paris Agreement

and the jurisdictional commitments that flow from

it, recognising that failing to play our role in

delivering emissions reductions would risk

undermining the wider decarbonisation goals of the

jurisdictions in which we operate. We are not

subject to entity‑specific legally mandated GHG

reduction targets beyond regulated mechanisms to

incentivise GHG reductions.

In the US, long‑term policy frameworks such as

New York’s Climate Leadership and Community

Protection Act and Massachusetts’ Clean Energy

and Climate Plan set out pathways to fossil‑free

energy systems by 2050, while in the UK the

Government’s Clean Power 2030 Action Plan

signals an accelerated transition to a decarbonised

power system. These commitments have shaped

the ambition and timing of our targets and reinforce

the importance of engagement with policymakers,

trade associations and industry bodies, where

responsible advocacy for enabling policy

frameworks is critical to delivering both

jurisdictional climate objectives and our net zero

commitment (see page 51).

We continually monitor our climate-related metrics

and targets to ensure that the data we measure is

meaningful, aligns with our strategy, and provides

the necessary information for effective performance

monitoring and progress demonstration. By

integrating these metrics into our financial

Enterprise Performance Management (EPM)

processes, it allows us to assess GHG reduction

performance in the context of wider enterprise

performance. Our annual Strategic Business

Planning cycle includes mechanisms to track

business units' plans against our SBTi glide paths.

Our monitoring and reporting processes

incorporate internal controls and a team of

technical consultants reviewed our CTP publication

for accuracy, consistency and any material

discrepancies. We have been clear that we do not

expect emissions reductions to follow a linear

trajectory and a significant portion of our emissions

are outside our control.

All of our GHG emissions are reported on a gross

basis, and our primary focus is on decarbonising

the business in line with a 1.5°C pathway. We do

not assume the use carbon offsetting to meet our

near‑term science‑based targets; however, we do

use limited carbon offsets to support our emissions

reduction efforts where emissions cannot be

reduced further, in line with SBTi guidance and our

internal carbon offsetting policy. The Group Carbon

Offsetting Policy, revised in 2025 under the

oversight of the Carbon Offsetting Committee,

helps ensures offsetting is used only as a

high‑integrity complement to direct emissions

reductions and requires a balanced portfolio across

carbon reduction and removal projects, locations,

technologies, storage durations, costs and

co‑benefits. All offsetting is governed by robust

principles including additionality, permanence,

transparency, independent verification and effective

risk management to help ensure environmental

integrity and value for National Grid.

Within our UK Electricity Transmission business, we

collaborated with Housing Associations’ Charitable

Trust to purchase around 1,000 Verified Carbon

Standard credits from achieved carbon reductions

delivered through energy efficiency initiatives in

low‑income households, delivering wider social

benefits to local communities. We also partnered

with Forest Carbon to purchase approximately

14,000 UK‑based Pending Issuance Units (PIUs)

from a bespoke portfolio of woodland projects.

These PIUs represent a promise to deliver a tonne

of carbon dioxide equivalent in the future and

support planning for the compensation of

UK‑based emissions, while delivering

environmental co‑benefits. Under the RIIO‑T3

framework, our UK Electricity Transmission

business has Ofgem‑approved funding of £16.17m

to support further carbon compensation over the

regulatory period. This funding is based on an

assumed unit cost of £74 per tCO₂e, capped at

6% of NGET’s business carbon footprint

GHG emissions.

Details of Directors’ remuneration, including the

incorporation of climate‑related considerations into

executive remuneration and the proportion linked

to such considerations in the current period, are

set out in the Directors’ Remuneration Report on

pages 107 – 126.

In addition to the metrics laid out on the following

page, we have disclosed the proportion of IFRS

revenue, operating expenditure and capital

expenditure that align with the principles of the

EU Taxonomy.

A significant proportion of our Scope 1 GHG

emissions are subject to either a traded carbon

price or a regulatory non‑traded cost of carbon.

These carbon prices are primarily applied through

regulatory frameworks rather than as an internal

shadow price for capital allocation. While carbon

pricing has enhanced our understanding of the

emissions implications of our activities, it has not

materially influenced investment decisions to date,

and we do not operate a single, Group-wide

internal carbon price applied uniformly across our

businesses. Carbon pricing is one of several tools

we use alongside policy drivers, regulatory

commitments, and carbon reduction

methodologies, including the application of carbon

weighting in tendering for construction projects.

On the next page we include our GHG emissions

footprint, a key indicator against our climate-related

risks and opportunities.

National Grid plc Annual Report and Accounts 2025/26	68	Strategic Report	Corporate Governance	Financial Statements	Additional Information
Task Force on Climate-related Financial Disclosures (TCFD) cont. Metrics and targets

Index of climate-related quantitative measurement indicators1

In the last year our emissions have risen, due to factors outside of our control and despite our efforts to reduce emissions where we have control.

Refer to pages 40 – 44 for further details.

	2025/26	2024/25	2023/24
SBTi validated GHG emissions reduction targets
Reduce absolute Scope 1 and 2 GHG emissions by 60% by 20302,3	(3.3)%	(4.4)%	(11.8)%
Reduce absolute Scope 1 and 2 GHG emissions excluding generation by 50% by 20302,3	(26.0)%	(14.7)%	(14.4)%
Reduce the carbon intensity of our power generation (Scope 1 GHG emissions) by 90% by 2030, and by 92% by 20333	2.5%	(36.7)%	(34.7)%
Reduce the carbon intensity of our power generation and sold electricity (Scope 1 and Scope 3 GHG emissions) by 86% by 20333	(1.2)%	(18.3)%	(15.4)%
Reduce absolute GHG emissions for all Scope 3, excluding sold electricity, by 37.5% by 20334	11.1%	5.8%	0.8%
Reduce absolute GHG emissions from gas sold by third parties by 37.5% by 20334,5	(9.6)%	(10.5)%	(17.6)%
Key climate-related metrics
Scope 1 GHG emissions (ktCO2e)	5,001	4,467	3,988
Scope 2 GHG emissions (ktCO2e, location based)	2,510	2,955	2,864
Total Scope 1 and 2 GHG emissions2 (ktCO2e)	7,511	7,422	6,852
Scope 3 GHG emissions (ktCO2e)	29,503	28,435	27,384
Total Scope 1, 2 and 3 GHG emissions2 (full value chain) (ktCO2e)	37,015	35,857	34,236
Intensity ratio: Scope 1 and 2 GHG emissions per million of revenue2 (tCO2e/£m)	425	427	345
Climate change adaptation capital expenditure (EU Taxonomy aligned activities, £m)	79	57	30
Climate change mitigation capital expenditure (EU Taxonomy aligned activities, £m)	9,756	7,610	5,962
Group energy consumption from fossil fuel generation (GWh)	19,317	17,390	14,375
Group energy consumption from electricity systems line losses (GWh)	15,111	15,514	14,519
Group energy consumption excluding fossil fuel generation and electricity systems line losses (GWh)	1,386	1,916	2,547
Total Group energy consumption (GWh)	35,814	34,820	31,441
UK energy consumption from electricity systems line losses (GWh)	9,702	10,413	10,046
UK energy consumption excluding electricity systems losses (GWh)	276	790	1,297
Total UK energy consumption (GWh)	9,978	11,203	11,343
UK Scope 1 GHG emissions (ktCO2e)	211	278	377
UK Scope 2 GHG emissions2 (ktCO2e)	1,670	2,137	2,113
Total UK Scope 1 and 2 GHG emissions2 (ktCO2e)	1,881	2,415	2,490

1.Refer to our Responsible Business Reporting Methodology

(methodology) on our website for calculation details. Target year

20Yn indicates that the performance will be reported in the

financial year that aligns with the year 20Yn/Yn+1. Our

methodology applies the GHG Protocol operational control

principle across all emissions and environmental metrics.

Operations that are sold or disposed of are excluded from

reporting from the year of exit. For this reporting year, this

includes National Grid Renewables and Grain LNG. Further

details are provided in the “Changes to global operations”

section within our methodology and in Note 1 (Basis of

preparation and recent accounting developments) to the

consolidated financial statements. We report Scope 3 emissions

across six categories within our current SBTi target boundary, as

defined by the GHG Protocol. Our disclosed Scope 3 GHG

emissions include GHG Protocol Scope 3 Categories 1, 2, 3, 5,

6, 7 and 11. Categories not listed are excluded as not material.

2.Includes Scope 2 location-based emissions only as line losses

make up the vast majority of these emissions and we have

limited renewable electricity certificates and other contractual

instruments in place. 2024/25 excludes National Grid ESO.

3.Near-term target approved by Science Based Targets initiative

(SBTi) and aligned to the Paris Agreement and a 1.5°C pathway.

GHG targets are against a financial year 2018/19 baseline.

4.Near-term target approved by SBTi and aligned to a well below

2°C pathway. GHG targets are against a financial year 2018/19

baseline.

5.Third-Party Sold Gas, a US-only emission, are downstream

emissions associated with the combustion of natural gas

delivered through our network but sold by a company other than

National Grid. This differs from Scope 3 Cat. 11 GHG Protocol

guidance, which otherwise advises to consider only the end use

of goods sold by the reporting company itself.

Note: The above data together with our Climate change – Scope 1,

2 and 3 emissions KPIs on page 27 and “Absolute energy

consumption in our flagship offices” on page 42 is responsive to the

UK Government’s Streamlined Energy and Carbon Reporting (SECR)

requirements. We have split out our Group energy consumption into

constituent parts for greater transparency. Fuels consumed for

power generation on behalf of LIPA, the contracting body is shown

separately because energy consumption related to power generation

can vary greatly year-on-year and is determined by LIPA. Amounts

are presented in GWh, with 1 GWh=1,000,000 kWh.

National Grid plc Annual Report and Accounts 2025/26	69	Strategic Report	Corporate Governance	Financial Statements	Additional Information
Financial review

A solid financial return

Making the connection – delivering outputs efficiently and earning a solid financial return.

Revenue	Profit and cash flows	Investment
The vast majority of our revenues are set in accordance with our regulatory agreements (see pages 220 – 225) and are calculated based on a number of factors, including investment in network assets, performance on incentives, allowed returns on equity and cost of debt, and customer satisfaction.	Our ability to convert revenue to profit and cash is important. By managing our operations efficiently, safely and for the long term, we generate substantial operating cash flows. Coupled with long-term debt financing, as well as additional capital generated through the Rights Issue and take-up of the shareholder scrip dividend option during periods of higher investment, we are able to invest in growing our asset base and fund our dividends.	We invest efficiently in our networks to achieve strong and sustainable growth in our regulated asset base over the long term. We also invest in assets in our non-regulated businesses. We continually assess, monitor and challenge investment decisions so we can continue to run safe, reliable and cost-effective networks.
Statutory revenue (%)	Statutory operating profit (%)	Capital investment (%)
Underlying net revenue1 (%)	Underlying operating profit1 (%)	Total assets (used for asset growth) (%)

ò
	UK Electricity Transmission (UK ET)	16%
ò
	UK Electricity Distribution (UK ED)	11%
ò
	New York	43%
ò
	New England	23%
ò
	National Grid Ventures (NGV)	6%
ò
	Other activities	1%

ò
	UK Electricity Transmission (UK ET)	30%
ò
	UK Electricity Distribution (UK ED)	21%
ò
	New York	22%
ò
	New England	17%
ò
	National Grid Ventures (NGV)	13%
ò
	Other activities	(3)%

ò
	UK Electricity Transmission (UK ET)	38%
ò
	UK Electricity Distribution (UK ED)	14%
ò
	New York	30%
ò
	New England	17%
ò
	National Grid Ventures (NGV)	1%
ò
	Other activities	—%

£17.7bn

£5.4bn

£11.6bn

ò
	UK Electricity Transmission (UK ET)	20%
ò
	UK Electricity Distribution (UK ED)	14%
ò
	New York	38%
ò
	New England	20%
ò
	National Grid Ventures (NGV)	8%
ò
	Other activities	—%

ò
	UK Electricity Transmission (UK ET)	30%
ò
	UK Electricity Distribution (UK ED)	22%
ò
	New York	30%
ò
	New England	15%
ò
	National Grid Ventures (NGV)	6%
ò
	Other activities	(3)%

ò
	UK Electricity Transmission (UK ET)	34%
ò
	UK Electricity Distribution (UK ED)	18%
ò
	New York	27%
ò
	New England	14%
ò
	National Grid Ventures (NGV)	4%
ò
	Other activities	3%

£13.2bn

£5.7bn

£72.0bn

1.Non-GAAP alternative performance measures (APMs). For further details and reconciliation to equivalent GAAP measures see Other unaudited financial information on pages 236 – 247.

National Grid plc Annual Report and Accounts 2025/26	70	Strategic Report	Corporate Governance	Financial Statements	Additional Information
Financial review cont.

Summary of Group financial

performance for the year

ended 31 March 2026

Statutory EPS1

65.5p

2024/25

2023/24

Underlying EPS1

78.0p

2024/25

2023/24

Group RoE

9.8%

2024/25

2023/24

Asset growth

10.9%

2024/25

2023/24

1.From continuing operations.

Financial summary for continuing operations

£m	2025/26	2024/25	Change
Accounting profit
Gross revenue	17,687	18,378	(4)%
Other operating income	489	—	n/m
Operating costs	(12,745)	(13,444)	5%
Statutory operating profit	5,431	4,934	10%
Net finance costs	(1,325)	(1,357)	2%
Share of joint ventures and associates	76	73	4%
Tax	(939)	(821)	(14)%
Non-controlling interest	(2)	(3)	33%
Statutory earnings	3,241	2,826	15%
Exceptional items and remeasurements1	(333)	(171)	n/m
Tax on exceptional items and remeasurements1	(16)	(40)	60%
Adjusted earnings1	2,892	2,615	11%
Timing and major storm costs1	636	592	n/m
Tax on timing and major storm costs1	(168)	(156)	n/m
Deferred tax on underlying profits in NGET and NGED1	499	401	24%
Underlying earnings1	3,859	3,452	12%
Statutory EPS	65.5p	60.0p	9%
Adjusted EPS1	58.5p	55.6p	5%
Underlying EPS1	78.0p	73.3p	6%
Dividend per share1	48.49p	46.72p	3.8%
Dividend cover – underlying1	1.6x	1.6x	3%
Economic profit
Group financial performance after interest and tax (Group RoE numerator)1	2,866	2,602	10%
Group RoE1	9.8%	9.0%	80bps
Capital investment and asset growth
Capital investment	11,576	9,847	18%
Regulated asset growth1	11.7%	10.5%	120bps
Asset growth1	10.9%	9.0%	190bps
Balance sheet strength
FFO/adjusted net debt1	13.0%	13.7%	-70bps
RCF/adjusted net debt1	9.3%	9.8%	-50bps
Net debt (note 29 to the financial statements)	44,160	41,371	7%
Add: held for sale net debt	—	(55)	n/m
Net debt (including held for sale)1	44,160	41,316	7%
Group regulatory gearing1	61%	61%	0bps

1.Non-GAAP alternative performance

measures (APMs) and/or regulatory

performance measures (RPMs).

For further details see Other

unaudited financial information

on pages 236 – 247.

National Grid plc Annual Report and Accounts 2025/26	71	Strategic Report	Corporate Governance	Financial Statements	Additional Information
Financial review cont.

Performance management framework

In managing the business, we focus on various non-IFRS alternative performance measures (APMs) and

regulatory performance measures (RPMs) which provide meaningful comparisons of performance between

years, monitor the strength of the Group’s balance sheet and ensure profitability reflects the Group’s

regulatory economic arrangements. Such APMs and RPMs are supplementary to, and should not be

regarded as a substitute for IFRS measures, which we refer to as statutory results.

Our business performance as set out in our regulatory agreements can differ from accounting under

IFRS, principally because our regulators allow for regulatory deferral accounting. Our allowed revenues

are set in accordance with our regulatory price controls or rate plans. Statutory IFRS does not allow us

to recognise regulatory assets or liabilities (for the difference between collected and allowed regulatory

revenues). As a result we use a suite of APMs (defined by us) to help measure and monitor our underlying

regulated business performance. We explain the basis of these measures and, where practicable,

reconcile these to statutory IFRS results (i.e. GAAP) in Other unaudited financial information on pages

236 – 247. Our RPMs have been calculated for the total Group (or individual entities where relevant)

and these are not based on IFRS measures. Specifically, we measure the financial performance of the

Group from different perspectives:

–Accounting profit: In addition to statutory IFRS measures we report adjusted results (i.e. before

exceptional items and remeasurements), and underlying results, which further take account of:

i) volumetric and other revenue timing differences arising from our regulatory contracts; (ii) major storm

costs (net of in-year allowances and deductibles) which are recoverable in future periods when they

exceed a $100 million threshold; and (iii) deferred tax in our UK regulated businesses (NGET and

NGED). In doing so, we intend to make the impact of such items clear to users of the financial

information in this Annual Report.

–Economic profit: Group Return on Equity (RoE) takes account of the regulated value of our assets

and of our regulatory economic arrangements to show the returns on shareholder equity.

–Capital investment and asset growth: Capital investment comprises our additions to PP&E and

intangible assets (excluding acquisitions), equity investments in joint ventures and associates, along

with net movements in capex prepayments. Asset growth represents the year-on-year increase in

RAV and US rate base in our regulated businesses (referred to as ‘regulated asset growth’), plus

the increase in net assets (excluding certain balances such as pensions, net debt and deferred taxes)

in our non-regulated businesses, but excluding the impact of currency movements.

–Balance sheet strength: Maintaining a strong investment grade credit rating allows us to finance

our growth ambitions at a competitive rate. Hence, we monitor credit metrics used by the major rating

agencies to ensure we are generating sufficient cash flow to service our debts. Group regulatory

gearing measures our Group net debt as a proportion of the Group’s assets that are used to measure

asset growth. This includes balances for businesses classified as held for sale under IFRS.

This balanced range of measures of financial wellbeing informs our dividend policy which aims to grow

annual DPS in line with UK CPIH, thus maintaining the DPS in real terms.

Financial summary for continuing operations

Accounting profit: Statutory IFRS earnings were £3,241 million in 2025/26, £415 million (15%)

higher than the prior year. Statutory earnings benefited from pre-tax net exceptional gains of £376 million

related to the sale of our two businesses (Grain LNG and National Grid Renewables) in 2025/26; and pre-

tax remeasurement losses of £43 million (2025: pre-tax net exceptional credits of £42 million and pre-tax

remeasurement gains of £129 million). For details on exceptional items, refer to note 5 to the financial

statements. Timing swings were £131 million adverse year-on-year, with a £636 million net under-

recovery in 2025/26 (2025: £505 million net under-recovery). These factors, the net impact of tax on these

items and an improvement in underlying business performance meant that statutory EPS for continuing

operations of 65.5p was 5.5p higher than the prior year.

Our ‘adjusted’ results exclude the impacts from exceptional items and remeasurements as explained

on page 155. In 2025/26, adjusted earnings from continuing operations were £2,892 million, up

£277 million (11%) from the prior year. Adjusted earnings in 2025/26 included a timing net under-recovery

after tax of £468 million (2025: £372 million net under-recovery). As a result, adjusted operating profit of

£5,044 million was up £279 million (2025: £4,765 million). Adjusted net finance costs of £1,271 million

were £90 million lower, as a result of higher average net debt and higher interest rates being more than

offset by higher capitalised interest and other interest income. Share of profits from joint ventures and

associates of £76 million were broadly flat year-on-year. Adjusted tax of £955 million was £94 million

higher, driven by the increase in profits, but resulted in a stable effective tax rate of 25.3% (2025: 25.3%).

Our policy is to exclude deferrable storm costs (net of allowances and deductibles) from underlying results if

these exceed a $100 million aggregate pre-tax threshold. In 2024/25, we included $110 million (£87 million)

of storm costs in our adjusted results, but excluded these from underlying results. In 2025/26, our

allowances were higher and deferrable storm costs were below this threshold, so $52 million (£39 million)

of deferrable storm costs that are recoverable in future periods are included in our underlying results.

Underlying operating profit was up 6% driven by improved performance in New York (from updated rates

and the collection of unremunerated costs in prior periods) along with higher allowed revenues in UK

Electricity Transmission (RAV growth and increased ASTI-related ‘fast money’). New England was lower

with updated rates and capital trackers being more than offset by a FERC order on Transmission Owner

RoEs across New England (mostly related to historical years). National Grid Ventures was lower mainly

as a result of the sale of two businesses in the year (Grain LNG and National Grid Renewables). Other

activities and the contribution from joint ventures and associates were broadly flat year-on-year. Regulated

controllable costs were 2% higher (at constant currency), with inflation and workload increases being

partly offset by efficiency savings. Depreciation and amortisation were higher than the prior year due to

our growing asset base. Net debt-related financing costs were higher, driven by our ongoing investment

programme. Other interest was favourable year-on-year driven by higher levels of capitalised interest.

After accounting for non-controlling interests, underlying earnings increased by 12% and resulted in

a 6% increase in underlying EPS to 78.0p.

Economic profit: Our Group RoE for 2025/26 was 9.8%, 80bps higher than the 9.0% achieved in the

prior year, with the numerator increasing by £264 million, (up 10% year-on-year), primarily driven by higher

regulatory business performance, compared with an increase in the denominator of £49 million (up 0.2%

year-on-year), which includes the beneficial impact of asset growth being partly funded by higher gearing.

Capital investment and asset growth: Capital investment of £11,576 million was £1,729 million

(18%) higher than 2024/25, driven by a step up in investment across our regulated businesses, partly

offset by lower investment in National Grid Ventures. Higher capital investment and the impact of RAV

indexation have helped deliver asset growth of 10.9% (2025: 9.0%).

Balance sheet strength: Net debt increased from £41.4 billion at March 2025 to £44.2 billion at

March 2026. Operating cash inflows of £7.8 billion (2025: £6.8 billion) along with disposal proceeds

from the sales of NG Renewables £1.5 billion and Grain LNG £1.3 billion helped to fund £10.6 billion

(2025: £9.7 billion) of investing cash outflows. Regulatory gearing was maintained at 61% (2025: 61%)

and our calculation of RCF/adjusted net debt credit metric was 9.3%, a decrease of -50bps compared

with 2024/25 and remains above the current rating threshold of 7.0%.

National Grid plc Annual Report and Accounts 2025/26	72	Strategic Report	Corporate Governance	Financial Statements	Additional Information
Financial review cont.

Dividend

The recommended full-year dividend per ordinary share of 48.49p is in line with our policy of increasing the prior year dividend in line with UK CPIH inflation and is covered 1.6 times by underlying EPS.

Profitability and earnings

In calculating adjusted profit measures, where we consider it is in the interests of users of the financial statements to do so, we exclude certain discrete items of income or expense that we consider to be exceptional

in nature. The table below reconciles our statutory profit measures for continuing operations, at actual exchange rates, to adjusted and underlying versions. Further information on exceptional items and remeasurements