What this stakeholder priority is about
This priority is about the steps we, as a responsible business, will take to improve the environment and serve communities and society.
It covers our contribution to tackling climate change, reducing waste, improving the natural environment and improving the visual impact of our assets.
It also covers how we support local communities, wider society, act as a responsible employer and promote ethical practices in our supply chain.
What you can find in this chapter
- What this stakeholder priority is about
- Track record and implications for T2
- What our stakeholders are telling us
- Our proposals for the T2 period
- The justification of our proposals
- Our proposed costs for the T2 period
- How we will manage risk and uncertainty
End to end description of stakeholder engagement and how it has influenced our plan
Engagement log - Environment and Communities
Investment decision packs set out the technical need case, options assessed and proposed investments.
Environmental Management System (EMS) annex
Our systematic approach to managing environmental risks and opportunities.
Inclusion and diversity policy Annex
Our policy for promoting inclusion and diversity
Environmental benchmarking Annex
Details the benchmarking the have undertaken to inform our environmental performance commitments
Procurement Benchmarking Annex
Benchmarking to inform our supply chain sustainability commitments
Environmental Action Plan and Methodology
Our plan for reducing our impact on the environment
Responsible Procurement Plan Annex
Our plan for enhancing responsible procurement through our supply chain
Business Management System (BMS) Annex
Our approach to driving minimum standards for environmental sustainability across the business
Proposals for how we can work towards removing SF6 insulating gas from our network
Our strategy for taking tranmission losses into account in our decision making
VIP T2 Project Provision Proposal
Proposals for extending the Visual Impact Provision into RIIO2
Baseline outputs – environment, our climate commitment and sustainability leadership
Stakeholder Feedback:
All stakeholders, especially consumers, want us to take ambitious action on climate change and potentially use carbon offsetting to make relevant activities carbon neutral as well as adopting responsible use of assets.
We should reduce the overall volume of SF6 we leak and continue efforts to find alternative insulating gases. Recent consumer testing has indicated that reducing emissions is almost as important as safety and reliability.
With no associated costs, 60% of consumers want us to be a carbon neutral business by 2030 or 2040 with younger citizens and women being the most supportive. Some consumers said they'd prefer our efficiency savings to be channelled in to environmental investments.
Proposal | T2 baseline | Consumer benefit |
|---|---|---|
1 of 3 net zero pathway investments towards a science based target (SBT) of 34% scope 1 & 2 emissions reduction i) agree funding with Ofgem and deliver a targeted SF6 asset replacement programme ii) leakage control ODI – volumes to be independent of replacement programme. iii) stop designing with 132kV SF6 assets in new builds by 2021 iv) stop using 275/400kV SF6 assets in new builds by 2024 (once two solutions are available), sending clear market signals to support this (in 2020) v) continue to use collaboration and innovation to develop alternative technologies so that we no longer have to buy equipment that uses SF6 as an insulating gas | N/A through Uncertainty Mechanism | Reduces the impacts of climate change, cleaner air in urban areas and climate progress across industry |
2 of 3 net zero pathway investments towards a science based target (SBT) of 34% scope 1 & 2 emissions reduction i) Operational fleet - replacing 100% with alternative fuel vehicles, where alternatives are available today (2019) ii) this commitment translates to 60% ET fleet replacement at today’s market availability iii) the benefit will be a 54% reduction in ET fleet emissions and -1% of scope 1 emissions iv) we will install and maintain charge points across 234 ET sites to enable our fleet commitment v) work with DNOs to ensure efficient use of infrastructure | £47.49m | Reduces the impacts of climate change, cleaner air in urban areas and climate progress across industry |
3 of 3 net zero pathway investments towards a science based target (SBT) of 34% scope 1 & 2 emissions reduction i) Purchased electricity – We will focus on an efficiency-first approach to decrease the carbon emissions from our office energy use by 20% ii) We will purchase 100% of our metered electricity from renewable sources | No funding Request | Reduces the impacts of climate change, cleaner air in urban areas and climate progress across industry |
Stakeholder Feedback:
We should make investment decisions based on the whole-life cost of each option, including the cost of carbon, and use this approach to help minimise our overall carbon emissions.
Proposal | T2 baseline | Consumer benefit |
|---|---|---|
| We will continue to report annually on the actions we have taken to reduce the transmission losses induced by our network as well as any activities that have impacted on the losses. | No funding Request | Reduces the impacts of climate change, cleaner air in urban areas and climate progress across industry |
| Capital carbon - Achieve net-zero carbon construction by 2025/26 by further implementing PAS2080, supported by an offsetting policy and based on current business assumptions that 180,000tCO2e can be offset with up to £2.5m. | £2.5m | Reduces the impacts of climate change, cleaner air in urban areas and climate progress across industry |
| Substation usage - We will create a substation energy efficiency programme. | No funding Request | Reduces the impacts of climate change, cleaner air in urban areas and climate progress across industry |
| Business transport - Reduce carbon emissions for our business transport by 10% from T1 to end of T2 - reduce vehicle use by promoting rail and virtual meetings and promote EVs on company car scheme and install electric car charging points at ET substations. | No funding Request | Reduces the impacts of climate change, cleaner air in urban areas and climate progress across industry |
| Supply chain - 75% of National Grid's top 250 suppliers (by category/spend) will have carbon reduction targets. | No funding Request | Reduces the impacts of climate change, cleaner air in urban areas and climate progress across industry |
| We will lead in transparency on capital carbon and natural capital using data and tools to collaborate and drive environmental progress. | No funding Request | Reduces the impacts of climate change, cleaner air in urban areas and climate progress across industry |
Baseline outputs – environment, our climate commitment and sustainability leadership
Stakeholder feedback:
We should minimise the local impact of construction on the environment. We should achieve environmental net gain at our construction projects, provided the costs are reasonable. We should be more ambitious in improving biodiversity.
Proposal | T2 baseline | Consumer benefit |
|---|---|---|
-10% increase in environmental value on all non-operational land by the end of the T2 period –prioritising deprived urban areas. -The ET estate is currently 2798 hectares and environmental value is measured in Biodiversity units and £ natural capital | No funding Request | Better local environment for communities, improved ecosystems and reduced climate change. |
| Deliver 10% net gain in environmental value (including biodiversity) on all construction projects (including those delivered by third parties) | No funding Request | Better local environment for communities, improved ecosystems and reduced climate change. |
- We will reduce the waste we create at our offices (waste tonnage) by 20% from a 2019/20 baseline - Reduce water use in our offices by 20% by the end of RIIO-2 compared to a 2019/20 baseline | No funding Request | Better local environment for communities, improved ecosystems and reduced climate change. |
Office and operational waste - On construction projects, we will achieve zero waste to landfill and we will increase the recycling or reuse materials by 2026 - baseline and set a target for construction waste recycling - we will reduce the waste intensity of our construction projects year on year | No funding Request | Better local environment for communities, improved ecosystems and reduced climate change. |
| We will maintain our high standards of oil containment and pollution management | No funding Request | Better local environment for communities, improved ecosystems and reduced climate change. |
| We will implement the ISO20400 sustainable sourcing process | No funding Request | Better local environment for communities, improved ecosystems and reduced climate change. |
| We will pilot and implement circular economy principles across the business | No funding Request | Better local environment for communities, improved ecosystems and reduced climate change. |
Baseline outputs – environment, Visual Impact Provision
Stakeholder feedback:
We have an established assessment methodology for assessing the VIP project priorities, created by an independent landscape specialist and an independent Stakeholder Advisory Group, consulted on and approved by Ofgem.
This methodology, along with extensive engagement reduced the shortlist down to 12 potential projects and then prioritised four for initiation in the T1 period.
Regarding the cost of the T1 VIP projects, most bill payers (66%) found it acceptable for the cost of VIP to be socialised via household bills.
Proposal | T2 baseline | Consumer benefit |
|---|---|---|
| Existing infrastructure in designated landscapes - We will continue with the stakeholder-led approach for Visual Impact project Provision project selection. | £202.36m | Improved areas of beauty for society to enjoy |
Baseline outputs – communities, supporting local communities, wider society, employees and the supply chain
Stakeholder feedback:
We should engage deeply with local communities affected by our construction projects. We should do more to help such local communities and consumers are willing to pay a material amount for us to carry out more community activities but this always comes out at one of the lowest priorities overall as the beneficiaries are narrower than the overall carbon goals.
We should be a responsible and sustainable business. We should work closely with business, our supply chain and consumers to achieve shared goals.
Our investors expect us to make our contribution to society a central axis of our long-term strategy, leading the energy transition.
Our total societal impact work suggested that we will have by far the biggest effect by advancing clean energy systems. Our contribution could be large in each area of electricity, transport and heat. Interviews and surveys also highlighted the priority that the public places on securing and accelerating the energy transition and doing so in a way that ensures fairness and equal access to the benefits of the transition.
Proposal | T2 baseline | Consumer benefit |
|---|---|---|
Communities close to a major* project - continue to fund the community-led grant scheme of up to £20k near to a construction project and £10k near our operations | No funding request | Enabling more diverse citizens to take part in the green transition and improved community spaces – helping to build pride and wellbeing in the local area |
Provide skills development which will increase employment potential for 6000 people, focusing on the low-income communities we serve Measure: #people trained | No funding request | Supports vulnerable consumers nationally, using core skills and expertise |
- We want to better represent the communities we serve and we will increase our hires from diverse backgrounds every year, by more than the current BAME and female proportions - UK Core: 14% BAME and 20% female; Group: 18% BAME and 24% female - We will report transparently on our entire workforce representation at all levels | No funding request | Improved employee wellbeing and ability to serve our stakeholders
Access to opportunity, fair pay and skills development can support social mobility. |
| We require all our suppliers, to pay the real living wage to their UK workers and will verify this at Tier 1 in relevant categories. | No funding request | Improved employee wellbeing and ability to serve our stakeholders
Access to opportunity, fair pay and skills development can support social mobility. |
| Promote skills development in the supply chain by requesting that a minimum of 5% of the supply chain technical headcount is upskilled annually. | No funding request | Improved employee wellbeing and ability to serve our stakeholders
Access to opportunity, fair pay and skills development can support social mobility. |
| Use influence to identify and address potential human rights exploitation in the supply chain. | No funding request | |
| Promote equal opportunities in the supply chain. | No funding request |
Non baseline outputs
Stakeholder feedback:
All stakeholders, especially consumers, want us to take ambitious action on climate change.
Proposal | Non baseline value | Consumer benefit |
|---|---|---|
1 of 3 net zero pathway investments towards a science based target (SBT) of 34% scope 1 & 2 emissions reduction i) agree funding with Ofgem and deliver a targeted SF6 asset replacement programme | TBD >£150m | Reduced the impact of climate change by meeting a net zero pathway |
Stakeholder feedback:
The Independent Stakeholder Group asked us to clarify what our visual amenity policy was in deprived areas. We have created an additional commitment to improve our assets or public space in deprived communities as a direct response to this challenge.
This has received excellent support from consumers in our acceptability testing workshops on the assumption that Ofgem approves efficient costs and impacted stakeholders select the projects to be completed.
The value tested was £10m per year, for this type of improvement and one of the supportive comments received was 'people should be able to be proud of where they live and some people don't have a choice'.
Proposal | Non baseline value | Consumer benefit |
|---|---|---|
| Communities close to assets, stakeholder-led prioritisation of budget to benefit urban disadvantage through an Urban Improvement Provision by improving our assets or public spaces (focused in the top 30% most deprived areas, per the index of multiple deprivation (IMD)). | £50m | Improved community spaces – helping to build pride and wellbeing in the local area. |