Approach and governance
Scope of reporting
Our online non-financial report 2016/17 is for the year ended 31 March 2017 and covers our wholly-owned global operations. We report in the areas of environmental sustainability, people and communities.
There have been no significant changes since the last report in the scope, boundary, or measurement methods applied in the report, apart from some of the data we do not include our UK Gas Distribution network following the sale of the majority stake of this business in March 2017.
We will publish our 2017/18 non-financial performance report in July 2018.
Key financial information is predominantly located in the Annual Report and Accounts. Background information about National Grid is set out in other areas of the corporate website.
Assuring our reports
We carry out external and internal assurance to:
- Ensure the content of our reporting on material non-financial issues and performance is balanced and accurate and fairly reports our material risks, impacts and performance;
- Test our awareness of and response to stakeholder issues;
- Obtain an independent view of developments in our non-financial strategy, management and implementation to determine our ability to deliver corporate-level objectives;
- Provide feedback to our Board and Executive Committee on the robustness of the governance, strategies, management and actions associated with our material non-financial issues; and,
- Ensure we report the issues that our stakeholders are interested in.
We have a formalised approach which describes the basis for reporting National Grid's non-financial performance data. It focuses on the key principles and practices, it describes:
- The scope of the Company's non-financial performance data;
- Our non-financial performance reporting boundaries and year;
- How acquisitions and disposals are treated;
- How we decide what non-financial performance data to report;
- How our non-financial performance data is verified before publication; and,
- What records should be kept.
Our individual business data owners are responsible for internally verifying the various non-financial reporting data and providing the supporting narrative needed to explain trends or material changes in the data.
Our Corporate Affairs department is responsible for ensuring data and where applicable, supporting narrative has been internally verified before disclosure and for checking the robustness and completeness of the verification evidence.
Reflecting the significance of climate change to our business, in 2012 for the first time we engaged an independent auditor, WSP Environmental & Energy, to verify our scope 1 and 2 emissions.
WSP completed its fifth annual verification of our GHG data in June 2017. Please refer to the 2016/17 greenhouse gas emissions assurance statement for the key findings.
Approach to tax
For 2016/17 our total tax contribution to the UK Exchequer was £1.5bn (2015/16: £1.6bn).
Taxes borne in 2016/17 were £644m, an 8.4% decrease on taxes borne in 2015/16 of £703m and primarily due to lower corporation tax payments in the current year. The main reason for this is the impact of our debt redemption costs during the year ended 31 March 2017, which reduced corporation tax instalment payments due for that year.
Our taxes collected were £887m, a reduction of 1% (2015/16: £899m). We expect our total tax contribution to fall next year following the sale of the UK Gas Distribution business on 31 March 2017.
Our 2015/16 total tax contribution of £1.6bn resulted in National Grid being the 15th highest contributor of UK taxes based on the results of the Hundred Group’s 2016 Total Tax Contribution Survey; a position in line with the size of our business and capitalisation relative to other contributors to the survey. In 2015 we were in 13th position. For taxes borne we ranked 9th in 2016; in 2015 we were in 7th position.
National Grid’s contribution to the UK economy is again broader than just the taxes it pays over to and collects on behalf of HMRC. The Hundred Group’s 2016 Total Tax Contribution Survey ranks National Grid in 3rd place for UK capital expenditure on fixed assets, up from 5th place in 2015. Our economic contribution also supports a significant number of UK jobs in our supply chain.