National Grid (NGG) 20-F2022 FY Annual report (foreign)

0001004315nggtf:DeferredMembersMembercountry:GBifrs-full:PensionDefinedBenefitPlansMember2022-03-310001004315ifrs-full:InterestRateRiskMembercountry:GB2020-04-012021-03-31

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

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Bring energy to life Annual Report and Accounts 2021/22

We see the future. It’s filled with infinite possibilities. That’s why we are... Our vision is to be at the heart of a clean, fair and affordable energy future. Every day we do the right thing, find a better way, and make it happen. We are working right now to deliver net zero and keep the network safe and reliable. Read more about what we are ‘Doing Right Now’ to enable a clean energy transition in the case studies that feature throughout this report. You can identify these by looking for this icon. Doing Right Now

Strategic Report 4 Business model 8 Our unique investment proposition 10 Chair’s statement 12 Chief Executive’s review 15 Our business environment 20 Succeeding with our strategy 22 Innovation 24 Key performance indicators 28 Internal control and risk management 33 Viability statement 36 Financial review 50 Our business units 56 Our stakeholders – Section 172(1) statement 60 Our commitment to being a responsible business 70 Task Force on Climate-related Financial Disclosures Corporate Governance 86 Governance at a glance 86 UK Corporate Governance Code – 2021/22 Compliance Statement 87 Chair’s statement 88 Our Board 90 Corporate Governance overview 99 Committee reports Financial Statements 134 Statement of Directors’ responsibilities 135 Independent auditor’s report 147 Consolidated financial statements 235 Company financial statements Additional Information 245 The business in detail 253 Internal control and risk factors 257 Shareholder information 262 Other disclosures 268 Other unaudited financial information 280 Commentary on consolidated financial statements 282 Five-year summary financial information 283 Definitions and glossary of terms 287 Want more information or help? 288 Cautionary statement Group financial highlights Group operational highlights Further reading Statutory earnings per share EPS (p)* 60.6p 37.0 29.7 20/21 19/20 Group safety performance (lost time injuries per 100,000 hours worked in 12-month period) 0.13 0.10 0.13 20/21 19/20 Underlying EPS (p)* 65.3p 42.4 47.9 20/21 19/20 Scope 1 and 2 greenhouse gas emissions (CO2 equivalent, m tonnes) 7.5 6.9 6.5 20/21 19/20 Group Return on Equity (RoE) % 11.4% 10.6 12.0 20/21 19/20 Employee engagement (%) 81% 81 77 20/21 19/20 * From continuing operations. Prior year comparatives restated for treatment of UK Gas Transmission as a discontinued operation. Front cover The North Sea offers an incredible opportunity for the UK and our European neighbours to migrate to a cleaner energy system, as we increase connections to renewable energy sources from the North Sea. We were excited to be a principal partner for COP26. COP stands for Conference of the Parties. You can read more about our involvement on pages 16 − 17. For more information, visit nationalgrid.com/responsibility/ environment/cop26. QR codes Throughout the report there are QR codes you can scan to view content online. Simply open the camera app on your smartphone to scan the code. Online report The PDF of our Annual Report and Accounts 2021/22 includes a full search facility. You can find the document by visiting the ‘About us’ section at nationalgrid.com/ investors/resources. Responsible business National Grid has published its annual Responsible Business Report (RBR). The RBR reports progress on the responsible business agenda, including towards the commitments made in our Responsible Business Charter (RBC). You can find both documents by visiting nationalgrid.com/responsibility. 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 2021/22 was $1.35 to £1 (2020/21: $1.34 to £1). Alternative performance measures In addition to 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 268 – 279. These measures are highlighted with the symbol above. Further reading Throughout this report you can find links to further detail within this document. PwC Assured Data Denotes information subject to limited assurance by PricewaterhouseCoopers LLP; see page 61 for full definition. 1National Grid plc Annual Report and Accounts 2021/22 S trateg ic R ep o rt C o rp o rate G o vernance Financial S tatem ents A d d itio nal Info rm atio n Highlights 02_Highlights_Contents_p01_v54.indd 1 27/05/2022 16:34

Business model 4 – 7 Our unique investment proposition 8 – 9 Chair’s statement 10 – 11 Chief Executive’s review 12 – 14 Our business environment 15 – 19 Succeeding with our strategy 20 – 21 Innovation 22 – 23 Key performance indicators 24 – 27 Internal control and risk management 28 – 32 Viability statement 33 – 35 Financial review 36 – 49 Our business units 50 – 55 UK Electricity Transmission 50 UK Electricity Distribution 51 UK Gas Transmission 52 UK Electricity System Operator 52 New England 53 New York 54 National Grid Ventures and Other activities 55 Our stakeholders – Section 172(1) statement 56 – 59 Our commitment to being a responsible business 60 – 69 Task Force on Climate-related Financial Disclosures (TCFD) 70 – 83 Doing Right Now Fossil-free future We aim to fully eliminate fossil fuels from our US gas and electric systems, enabling the customers and communities we serve to meet their heating needs without using fossil fuels by 2050, if not sooner. To achieve our ambition, we are proposing a hybrid approach, with a combination of electric heat pumps, fossil-free gas and hybrid gas-electric systems. National Grid plc Annual Report and Accounts 2021/222 03_Business_model_p02_07_v84.indd 2 27/05/2022 16:35

Strategic Report S trateg ic R ep o rt National Grid plc Annual Report and Accounts 2021/22 3 03_Business_model_p02_07_v84.indd 3 27/05/2022 16:36

UK Electricity Transmission We own and operate the high-voltage electricity transmission (ET) network in England and Wales. UK Electricity Distribution We own and operate the electricity distribution networks for the Midlands, the South West and South Wales. The combined network of Western Power Distribution (WPD), which became part of National Grid in June 2021, makes it the largest distribution network operator (DNO) group in the UK. UK Gas Transmission* On 27 March 2022, we announced the agreement for sale of a 60% stake in this business, which owns and operates the gas transmission network across Great Britain (including our UK metering business which previously formed part of NGV). The sale is subject to certain conditions. UK Electricity System Operator We operate as the electricity system operator (ESO) across Great Britain. New England We own and operate electricity transmission facilities and distribution networks across Massachusetts, New Hampshire and Vermont as well as gas distribution networks across Massachusetts. We sold our Rhode Island electricity transmission and gas and electricity distribution business (NECO) to PPL. The NECO Sale is expected to complete by the end of the first quarter of 2022/23. New York We own and operate electricity transmission facilities and distribution networks across upstate New York. We own and operate gas distribution networks across upstate New York, in New York City and on Long Island. Further reading Our business units on pages 50 – 55 Electricity transmission We are responsible for ensuring electricity is transported safely and efficiently from where it is produced, to reach homes and businesses reliably. We connect to industrial properties and distribution networks who deliver the electricity on to homes and commercial properties. We also facilitate the connection of generation assets to the transmission system. We are also competing for large-scale electricity transmission projects across the US and the UK. To find out more, visit our website: nationalgrid.com/ national-grid-ventures/what-we-do/ competitive-transmission. Electricity System Operator We are responsible for making sure the supply of and demand for electricity are balanced in real time every day across Great Britain. In the US, similar services are provided by independent system operators. Gas transmission We are responsible for making sure Great Britain’s gas is transported safely and efficiently from where it is produced, to reach homes and businesses reliably. As the gas system operator, we are also responsible for ensuring supply and demand are balanced in real time every day. Some of our US businesses are not subject to state or federal ratemaking authority. This includes our interests in the New York Transco and Millennium Pipeline Company. Generation Generation is the production of electricity from fossil fuel and nuclear power stations, as well as renewable sources such as wind and solar. In the US, we own and operate electricity generation facilities on Long Island as well as wind and solar generation through our investment in the Emerald Joint Venture. Renewable energy We are working with our partners to accelerate the development of our clean-energy future. In support of this goal, we’ve made significant investments in the US in large-scale renewable energy projects, including wind, solar and battery storage. Visit our website to find out more information: nationalgrid.com/ national-grid-ventures/what-we-do/ renewable-energy. 4,740* miles (7,630 kilometres) of high-pressure gas pipe (2020/21: 4,740 miles; 7,630 kilometres) 6,072 miles (9,768 kilometres) of electricity transmission cable and overhead lines (2020/21: 6,240 miles; 10,042 kilometres) 2,939 miles (4,729 kilometres) of electricity transmission cable and overhead lines (2020/21: 2,922 miles; 4,701 kilometres) 6,001 miles (9,655 kilometres) of electricity transmission cable and overhead lines (2020/21: 6,050 miles; 9,734 kilometres) Our business units How we fit in the energy system National Grid plc is one of the world’s largest investor-owned energy utilities, committed to delivering electricity and gas safely, reliably and efficiently to the customers and communities we serve. * Discontinued operations. National Grid plc Annual Report and Accounts 2021/224 What we do Business model 03_Business_model_p02_07_v84.indd 4 27/05/2022 16:36

Regulatory asset value (RAV), rate base and other assets (%) 26% 16% 11% 1% 16% 22% 8% Statutory operating profit (%)* 24% 21% 0% 17% 25% 13% Underlying operating profit (%)* 29% 22% 1% 22% 18% 8% National Grid Ventures and Other activities National Grid Ventures (NGV), which operates separately from our core regulated units, is focused on competitive markets across the UK and US. Its portfolio includes electricity interconnectors, liquefied natural gas (LNG) storage and regasification, large-scale renewable generation, conventional generation and competitive transmission. Other activities primarily relate to National Grid Partners (NGP), the venture investment and innovation arm of National Grid, as well as UK property, insurance and corporate activities. Gas distribution In the US, we deliver gas safely and reliably to millions of consumers connected to our distribution systems. Some of our customers pay us for distribution and gas supply costs. Where they choose to buy gas from third parties, they pay us for distribution only. Electricity distribution We own and operate the power lines and infrastructure that connect the transmission network to the properties of individual consumers. Distribution networks convert high-voltage electricity generated by large power stations, and delivered through the transmission network, to lower voltages. This is then delivered safely and reliably into homes and businesses via our networks. Electricity interconnection Interconnectors are high-voltage cables used to connect the electricity systems of neighbouring countries. They allow us to trade excess power, such as renewable energy created by the sun, wind and water, between different countries. We already have interconnectors linking us to France, Belgium, Norway and the Netherlands, and each year they power five million homes. We’re currently working on another interconnector to link us with Denmark. Storage Grain LNG is one of three import terminals in the UK. Our world-class facility delivers the highest standards of performance for our customers. We import LNG from a number of countries and also own storage facilities in the US. Innovation We created NGP which is involved in incubating and investing in startups at the intersection of energy and emerging tech, launching new businesses from scratch, business development, and infusing an entrepreneurial culture into National Grid. NGP aims to create a smarter, renewable future. 141,261 miles (227,337 kilometres) of electricity distribution circuits (2020/21: 141,081 miles; 227,000 kilometres) 14,397 miles (23,165 kilometres) of gas pipelines (2020/21: 14,372 miles; 23,125 kilometres) 22,359 miles (35,975 kilometres) of gas pipelines (2020/21: 21,388 miles; 34,413 kilometres) 63 ships unloaded at the Grain LNG terminal (2020/21: 49 ships) 24,755 miles (39,831 kilometres) of electricity distribution circuits (2020/21: 24,706 miles; 39,752 kilometres) 44,536 miles (71,658 kilometres) of electricity distribution circuits (2020/21: 44,063 miles; 70,897 kilometres) 6.4 GW capacity of interconnectors in operation (2020/21: 5 GW) How we fit in the energy system * From continuing operations. S trateg ic R ep o rt National Grid plc Annual Report and Accounts 2021/22 5 03_Business_model_p02_07_v84.indd 5 27/05/2022 16:36

Our strategyOur resources and relationships Internal resources Physical assets We own electricity and gas networks that transmit energy over long distances from where it is produced, together with low voltage local networks that distribute energy to the consumers who rely on it. These networks are built to last for many decades and account for the vast majority of our asset base. We also own five subsea electricity interconnectors, with a further subsea cable to Denmark under construction, as well as LNG importation facilities and large-scale renewables in the US. Funding We fund our business through a combination of shareholder equity and long- and short-term debt. We maintain an appropriate mix of the two and manage financial risks prudently. Colleagues Our highly skilled, dedicated colleagues have a strong public-service ethos. They manage and maintain the physical energy infrastructure, and assist and develop the many stakeholder relationships crucial to the Company’s success. Strong stakeholder relationships Our business relies on strong relationships with all our stakeholders. These include: • Our customers, who depend on us to connect them to the energy they use and who (through a small portion of their energy bills) pay to use our networks. This also includes (in the case of our transmission businesses) the electricity generators and gas suppliers who own the electricity that flows through our cables and gas pipes. • Our suppliers, who have complementary experience, skills and resources and with whom we agree mutually beneficial contractual arrangements and, wherever possible, take advantage of economies of scale and use sustainable and global sourcing opportunities. • National and regional governments, local communities, and business and domestic consumers of the energy we transport. • The economic regulators who set the prices we can charge for providing an economic, efficient and non-discriminatory service as well as the government agencies responsible for health, safety and environmental standards. Enable the energy transition for all Deliver for customers efficiently Grow our organisational capability Empower colleagues for great performance Why does this matter? Benefits to National Grid Financial strength By managing our operations efficiently, safely and for the long term, we generate substantial cash flows. This, coupled with long-term debt financing, enables us to invest in growing our asset base and fund our dividends. Investment Efficient investment in our networks will deliver strong and sustainable growth in our regulated asset base over the long term. Lower capital costs Using innovation and flexibility initiatives, we look to reduce the amount of network reinforcement costs that would otherwise be needed to deliver the additional capacity required for net zero. Shareholder returns Our dividend policy, approved by the Board in March 2021, is to deliver annual dividend per share growth in line with the rate of CPIH inflation. Our dividend has grown consistently for more than 20 years. Further reading Our stakeholders on pages 56 – 59. 6 National Grid plc Annual Report and Accounts 2021/22 How we operate Business model 03_Business_model_p02_07_v84.indd 6 27/05/2022 16:37

How we create value The value we create We rely on our internal resources and our strong relationships which we use to do business, drawing on our technical expertise and culture in order to deliver value for our stakeholders and for wider society. Why does this matter? Benefits to society Customers We aim to deliver safe, reliable, resilient and affordable energy to customers in the communities we serve, driving operational excellence and financial discipline to keep bills affordable for our customers. Investors We aim to be a low-risk, dependable investment proposition, focused on generating shareholder value through dividends, supported by asset growth from investing in essential assets under primarily regulated market conditions, and servicing long-term sustainable consumer-led demands. Our colleagues We aim to create an environment where our colleagues can make a positive contribution, develop their careers and reach their full potential. Contractors and suppliers We maintain responsible and efficient supply chains where we align our interests, and those of our suppliers, with the interests of customers. Communities and governments We help national and regional governments formulate and deliver their energy policies and commitments. The taxes we pay help fund essential public services. We have an important role to play in sustainability, enabling the transition to a low-carbon future. Economic, health, safety and environmental regulators Through constructive, transparent engagement and consistent, reliable fulfilment of our commitments, we build trust with our regulators. Our technical expertise We combine our extensive skills, knowledge and capabilities with innovation to ensure we continuously create value for shareholders and wider stakeholders alike. Our expertise includes: Asset management We invest in and maintain our assets across their life as cost effectively and efficiently as possible. Engineering The skills of our engineers are vital in performing safely, efficiently, reliably and sustainably for all our businesses. Our colleagues strive to: • find practical and innovative solutions to complex problems; • employ risk-based decision making; and • adopt common approaches and make continuous improvements. Our engineering expertise supports the provision of a reliable network. Capital delivery We add value for our stakeholders by ensuring safe and effective delivery of large and complex infrastructure projects, ranging from large portfolios of smaller works to more substantial standalone projects. Our culture National Grid’s culture is the values, beliefs and behaviours that characterise our Company and guide what we do, so we can respond as the energy transition accelerates. We maintain high standards of ethical business. We also promote behaviours that are aligned with our values and culture by recognising our employees through a Company-wide reward system. This supports both what they achieve and how they have achieved it. Strategy and risk management As the energy industry continues its transition to a cleaner future, our strategy articulates our priorities clearly, while positioning our business to continue to bring long-term economic benefits into the regions where we operate. We have well-established governance structures that include comprehensive risk management, strong controls and financial discipline. Achieving net zero In addition to our own commitment to reduce our Greenhouse Gas (GHG) emissions to net zero by 2050, we are working with governments and regulators to help them meet their carbon reduction targets. Communities The transition to clean energy must be affordable to all, and we will play our role in ensuring no one is left behind, helping the places where we operate reach their emissions targets. Job creation We are providing employment opportunities and supporting our colleagues in building the skills necessary to build a net zero energy system. Tax contribution We recognise that our tax contribution supports public services and the wider economy and we endeavour to pay the right amount of tax, at the right time, in accordance with relevant tax laws. Further reading Our strategy on pages 20 – 21. Innovation on pages 22 – 23. Internal control and risk management on pages 28 – 32. Our commitment to being a responsible business on pages 60 – 69. Our values on page 65. 7 S trateg ic R ep o rt National Grid plc Annual Report and Accounts 2021/22 03_Business_model_p02_07_v84.indd 7 27/05/2022 16:37

Reshaped portfolio Delivering growth Strong operational and financial performance We’ve reshaped the portfolio and organisation for the opportunities ahead of us. These moves will increase our exposure to electricity, enhancing the long-term growth profile of the Group and better aligning to the energy transition. We have a strong track record of delivering efficiently, and our new operating model will deliver a step change in productivity improvements. Alongside our asset growth, we forecast to grow our underlying EPS by 5 − 7% compound annual growth rate (CAGR). Our forecast of £30 − 35 billion of capital investment between 2021/22 and 2025/26 will drive asset growth of 6 − 8% on average per annum (CAGR). Over two thirds of this is already committed and visible through rate settlements and in our National Grid Ventures business. Geographic and regulatory diversity History of strong financial performance History of strong operational and financial performance 1. Calculated as an approximate proportion of actual 2021/22 asset base as at year end, including WPD, excluding NECO sale and 60% interest in UK Gas Transmission and Metering. 2. Includes NGP, UK property, insurance and corporate activities. UK US NGV & Other2c.53c.40 c.7 Gas Electricity c.70 c.30 Employee Engagement Score (%) 81 77 81 21/22 19/20 20/21 National Grid asset base post transactions1 RoE (%) 11.4 12.0 10.6 21/22 19/20 20/21 Group asset growth 8.7% 9.0% 5.6% 21/22 19/20 20/21 FULL YEAR From continuing operations 02 0 6 7 5 4 3 2 1 0403 05 06 07 08 09 10 11 12 13 14 15 16 17 19 20 21 2218 Including discontinued operations Capital investment £bn Underlying (continuing) EPS (p) 65.3 47.9 42.4 21/22 19/20 20/21 8 National Grid plc Annual Report and Accounts 2021/22 Our long-term value creation is underpinned by significant growth opportunity across the business, driven by our vital role as The Energy Transition Company Our unique investment proposition 04_Investment_case_p08_09_v86.indd 8 27/05/2022 16:38

Resilient balance sheet Progressive dividend Our responsible business We have visibility to maintain a resilient balance sheet and stable leverage (once all three transactions are complete), to fund asset growth of 6 – 8% on average per annum (CAGR) over the next five years. Over the next five years we expect senior debt capacity to increase by £2 – 3 billion annually. We continue to be vocal advocates for a fair and equitable energy transition across wider public policy. We are a COP26 principal partner and are advocates of transforming commitments into action. We have consistently grown our dividend for more than 20 years. Full-year dividend 50.97 pence p/share in line with policy, 49.16 pence p/share in the prior period. As our UK regulatory models move from Retail Price Index (RPI) to the Consumer Prices Index including Owner Occupiers’ Housing Costs (CPIH), we aim from 2021/22 to grow the annual dividend per share in line with UK CPIH. Balance sheet metrics Dividend per share (DPS) (p) Note: 2000 – 2010 DPS adjusted for 2010 Rights Issue, excludes special dividends. We monitor RCF/adjusted net debt in order to ensure the Group is generating sufficient cash to service its debts, consistent with maintaining a strong investment-grade credit rating. We calculate RCF/ adjusted net debt applying the methodology used by the credit rating agency, Moody’s Investors Services. Our Responsible Business pillars Communities Deliver energy in a fair and affordable way to the communities we serve. The economy Work across our supply chains to ensure that, together, we reflect the diversity of the communities we serve and respond to the economic needs of those communities. Governance Achieve 50% diversity1 in our Group Executive Committee Our colleagues Achieve 50% diversity1 in all our new talent programmes by 2025. The environment Accelerate our net zero targets wherever possible. 2000 0.00 0.60 0.50 0.40 0.30 0.20 0.10 2007 2014 2022 1. A diverse employee is defined as a colleague who identifies as female, as a person with a disability, as gay, bi-sexual or lesbian or from an under-represented ethnic/racially diverse background. 1. Capital expenditure invested in decarbonisation of the energy systems and considered to be aligned with the principles of the EU Taxonomy legislation at the date of reporting. 8.9% RCF/Adjusted debt >7.0% Moody’s rating threshold 4.7x FFO Interest cover >3.5x Moody’s rating threshold (2020/21: 4.5x) 9 S trateg ic R ep o rt National Grid plc Annual Report and Accounts 2021/22 Our vision for our future energy networks aligns with the global push towards net zero, and demonstrates the vital role we play. And with that vision, as we look to the decades ahead, we believe the scale of opportunity across the business is significant. 1. Our pivot to electricity brings visibility and certainty of growth, right now and out to 2050. 2. Our scale magnifies our vital role at the heart of the energy transition. 3. We have a strong track record of delivering growth. 4. Green capex1 in decarbonisation of energy systems, will make up around £24bn of our investment between 2021/22 and 2025/26. Five-year outlook 2021/22 – 2025/26 Capital investment £30 – 35bn c.£8bn UK Electricity Transmission c.£17bn New York & New England regulated businesses c.£5bn UK Electricity Distribution c.£2 – 3bn NGV Group asset growth 6 – 8% CAGR Gearing Peaks in 2021/22, settles slightly above 70%. Credit metrics within current rating band Earnings Per Share (EPS) Dividend Per Share (DPS) 5 – 7% CAGR Growth in line with CPIH 04_Investment_case_p08_09_v86.indd 9 27/05/2022 16:38

Paula Rosput Reynolds Chair “ National Grid finished the fiscal year in a position of strength. As nations now focus on energy security and affordability, as well as decarbonisation, we embrace our role in delivering the energy system of the future.” It is a privilege to be the first American to serve as the Chair of National Grid, an iconic industrial company. National Grid has a proud and longstanding heritage, but it is also a business that has long been focused firmly on the future. We didn’t start the process of being a state-of- the-art energy system yesterday. For more than two decades we have been working to decarbonise energy. We have been iterating and experimenting with our fulfilment capabilities – with the digital grid, with hydrogen, with multipurpose interconnectors. And we will keep iterating and collaborating until we achieve the necessary levels of performance to assure you that clean energy delivery will be utterly reliable and affordable as well. At National Grid, we are witnessing the increasing intensity of impatience in society in its pursuit to see changes in the contours of our energy system. We are working on multiple fronts to deliver infrastructure and service more quickly and more cleanly than ever before, including: digitalisation of business systems and operations to ensure service reliability and rapid response time; increased cyber security barriers to protect our critical national infrastructure; and use of advanced technologies, such as artificial intelligence (AI), to optimise our operations. And we are focused on the best possible delivery on the front lines. Perhaps you have noticed that storms are more frequent and severe. Meanwhile, society is dependent on rapid restoration of service. We live in a connected world and none of us easily tolerates a power outage. My National Grid colleagues are thus working in increasingly harsh weather conditions to reconnect customers in ever shorter response times. This is complicated by the fact that we are managing the increased complexity of the grid itself, as renewables become a larger part of the generation mix in both countries. These are among the issues of today and tomorrow. As Chair, my role is to ensure our governance both challenges and supports decision making that will ultimately lead to a decarbonised and digital future. Our business reorganisation, the refresh of the Board and the thoughtful adjustment of our investment mix are intended to meet these challenges. The events of the past year – indeed, the past months – have tested the resolve, culture and resilience of all businesses. As I write this first letter to you in my role as Chair, Ukraine is engulfed in a brutal confrontation with Russia. At National Grid, we supported and adjusted quickly to the Russian sanctions put in place by the UK government. We have also been engaging with the UK government on assuring long-term security of energy supply, including through accelerating the roll-out of renewables. In the US, we continue to work on an agenda of decarbonisation, ranging from new high-voltage electric transmission infrastructure for delivery of low- or zero-carbon resources to operating one of that nation’s first hydrogen blending projects. In both countries, we undertake our efforts against the backdrop of elevated energy prices for our customers and heightened concerns about balancing the costs of system enhancements with the affordability of these improvements. 10 National Grid plc Annual Report and Accounts 2021/22 Chair’s statement 05_Chairs_statement_p10_11_v52.indd 10 27/05/2022 16:40

The 2022 Annual General Meeting (AGM) of National Grid plc will be held as a hybrid event at 10.00am on Monday 11 July 2022. More details on the arrangements for this year’s AGM and how to view the live webcast of the AGM vote and attend virtually can be found on our website in the Investors section at: nationalgrid.com/investors. Final dividend of 33.76p per share proposed to be paid on 17 August 2022 A Board for the future As you will note, several distinguished Board members have reached the ends of their terms. Sir Peter Gershon, Dr Paul Golby, Mark Williamson, and Jonathan Dawson have all served nine-year terms. In addition, Amanda Mesler, who has been a member of our Board for the last four years, has decided not to stand for re-election as her career in technology takes her in some different directions. On behalf of my Board colleagues, I express my appreciation to all of them. Nevertheless, from this loss comes opportunity. We are fortunate to have recruited five new Directors who bring fresh perspectives and experience to the Board Ian Livingston, Tony Wood, Martha Wyrsch, Anne Robinson and Iain MacKay, bring strategic thoughtfulness, engagement, constructive challenge, independence and gravitas to tackling the issues we face. Operating with purpose Moments of societal reckoning over recent times have further cemented my belief that National Grid must respond as a responsible business. It is clear: we are here to serve. Our sense of the larger purpose we play in society helps us keep doing the right thing at the heart of our decision making. As I have travelled around the National Grid system in both countries, I am heartened by the ethos of our people. I have also seen this ethos of community engagement first-hand in the work that is done by Grid for Good, Project C and our Grid Employability programmes, to name but a few examples. Our RBR, which you can find at nationalgrid. com/responsibility, provides an update on our excellent progress to date on key commitments. Along with purpose comes partnership. Working with regulators, customers, communities, stakeholders and business partners is key to our long-term health as a company. I have appreciated the candour of those of you with whom I have met in the past year. This input – unvarnished and honest exchanges – helps guide the Board deliberations. Solutions to the challenges of our time must be rooted in an overarching sense that we are in this together, working for the collective good. Geopolitical upheaval only deepens the sense within society that we must embrace change urgently. Across the UK and US, we are working with governments and communities to determine the best way forward for the delivery of net zero. In recognising that National Grid must change, 50.97 48.57 49.16 45.93 47.34 21/22 19/20 18/19 17/18 20/21 Full-year dividend (pence per share) I see that governments, regulators and stakeholders are grappling with how to drive progress as well. I would offer the observation that we all need to break old habits and get on with the business of change. Looking forward In the previous fiscal year, we set a strategic course to pivot to a greater focus on electricity as the energy mix of the future. With the acquisition of WPD and the announced sale of a majority stake of our UK natural gas transmission business, our portfolio is changing. The Board will continue to assess the businesses we will participate and grow in as the energy landscape evolves. For example, we welcome the UK government moving forward with the development of a Future System Operator (FSO). This initiative is expected to see us divest our ESO in the future. Similarly, our investments in the various interconnectors which link the UK to continental Europe and our partnership with RWE in the New York Bight auction for offshore wind, are examples of investments where we are leaning into the future energy system. As you will note in the Notice of Meeting which accompanies this Annual Report, our climate transition plan is being put to a vote by shareholders at our 2022 AGM. I hope you will find that this plan provides tangible evidence of National Grid’s resolve to move to net zero, including metrics that facilitate tracking of our progress. We ask for your support of our Climate Transition Plan, your Board of Directors, and various other business matters on which you are asked to vote. In closing, I would like to recognise our National Grid colleagues with this oft-repeated phrase: if it were easy, everyone would be doing it. The Board recognises your singular efforts, your dedication and your tenacity. Your enthusiasm for delivering net zero and a fair energy transition is, I believe, unparalleled. Thank you for living our values and for Doing Right Now. Paula Rosput Reynolds Chair 11 S trateg ic R ep o rt National Grid plc Annual Report and Accounts 2021/22 05_Chairs_statement_p10_11_v52.indd 11 27/05/2022 16:40

“ We will enhance our role in the energy transition and drive long‑term shareholder value.” governments and regulators to deliver an energy transition that leaves nobody behind. Whilst we do not have control over energy prices, we are playing our part by innovating at speed on projects and making significant capital investment to bring cheaper, greener energy to our customers. I was particularly pleased to see clean energy sitting at the heart of the British Energy Security strategy – net zero is a clear route to a reduction in consumer bills over the long term, increased energy independence and lower carbon emissions. As a sector, we must now work at pace to deliver the ambitious targets set and remain conscious, too, of other opportunities to reach our collective goals, such as increased energy efficiency. In the UK, we have been working closely with government, industry and the regulator to create the FSO that enables long-term holistic thinking, drives progress towards net zero, and lays the foundations for the regulatory reform necessary to deliver the energy system of the future. As announced in April 2022, the ESO is expected to transfer out of National Grid to become part of the newly created FSO by 2024. We will continue to work closely with all relevant parties to ensure a smooth transition, subject to parliamentary approval and conclusion of the transaction process. In a fast-moving world, we must remember that the challenge of reaching net zero cannot be underestimated, and significant policy and regulatory change will be needed to get there. We are committed to working together with all our stakeholders to create the right policy and regulatory frameworks to deliver the investment needed at the lowest long-term cost to consumers in all our markets. Business highlights Delivering for our customers remains my key focus and I am very clear that this must underpin all that we do. A clear example is our vision for a fossil- free future in the US, launched in April 2022, which places consumer choice and affordability at the heart of fighting climate change. This vision to fully eliminate fossil fuels from our US gas networks, replacing it with renewable natural gas and green hydrogen, will enable the customers and communities we serve to meet their heating needs without using fossil fuels by 2050, if not sooner. Combined with targeted electrification and enhanced energy efficiency, a 100% fossil-free gas network can deliver a clean energy future that is more affordable and more reliable to more than 20 million people across New York and Massachusetts. Context in which we are operating Over the last 12 months, as the world took tentative steps out of the depths of the COVID-19 pandemic, it also witnessed unprecedented climate events, an increasingly divided geopolitical landscape, and – in the UK and US – rising costs of living. As I write, we continue to witness terrible events in Ukraine. The combined turmoil and change of the past year means that all three points of the energy trilemma (security, affordability and sustainability) are now in sharp focus as one. In a rapidly changing world, it is more important than ever that our vision is clear and our journey to achieve it is well executed. National Grid will be at the heart of a clean, fair and affordable energy future. There is no doubt that rising gas prices and a higher cost of energy in the UK and US have highlighted the challenge of affordability. Our political stakeholders in all jurisdictions are also grappling with this challenge, and we continue to take a partnership approach with both John Pettigrew Chief Executive 12 National Grid plc Annual Report and Accounts 2021/22 Chief Executive’s review 06_CEO_review_p12_14_v46.indd 12 27/05/2022 16:41

Key highlights in 2021/22 11.4% RoE £6.7bn investment in critical infrastructure for the Group (continuing operations) We have made significant progress throughout the year towards a clean energy future in the US. In December, we launched a joint project with the town of Hempstead to build one of the first and largest clean hydrogen projects in the US. The HyGrid project, on Long Island, will blend green hydrogen into the existing distribution system to heat approximately 800 homes and fuel 10 municipal vehicles. A key highlight of the year for me was National Grid’s role as a Principal Partner of COP26. This enabled us to drive action on the fight against climate change more directly than ever before. From meeting with world leaders, to hosting the launch of the global Green Grids Initiative, and sharing our work to enable clean transport, it was a unique opportunity to discuss our learnings with delegations from across the globe and collaborate on how best we can work together to accelerate action. It is important we match talking with doing. Since COP26, we have had new Science Based Targets approved; with both our UK ET and ED businesses and the ESO limiting their greenhouse gas emissions to a 1.5ºC warming scenario. And against a 1990 baseline, I can now report our carbon emissions are down by 65% across the Group. The year also saw us deliver on the strategic transactions we announced 12 months ago. The transactions represented a strategic pivot for National Grid and underlined our belief that the journey to net zero will see increased electrification across the UK and US. The Group expects the NECO Sale to complete by the end of Q1 2022/23. The year saw us make good progress on regulatory matters. In the first half, the Competition Markets Authority (CMA) upheld part of our appeal on RIIO-T2, which saw the removal of the outperformance wedge. In the US, new rate agreements for KEDNY-KEDLI, Massachusetts Gas and Niagara Mohawk were agreed during the year, giving us long- term visibility. Our National Grid Ventures business continues to deliver clean, green energy through its interconnectors. We completed our fifth interconnector, North Sea Link (NSL), which connects the UK with Norway and is the world’s longest subsea interconnector. NSL, which is a joint venture with Norwegian system operator Statnett, can provide enough clean electricity to power 1.4 million homes. The fire at our IFA interconnector saw a 50% reduction in its capacity. However, I am pleased that our team’s fast response and focus on recovery means we now expect the IFA interconnector to return to full service in December 2022, significantly earlier than planned. WPD, our electricity distribution business, which will shortly be rebranding under the National Grid name, has submitted a highly ambitious business plan for 2023 − 2028 outlining £6.7 billion of investment to drive the pathway to net zero for our customers in the Midlands, South Wales and the South West. This will act as an additional £1.4 billion of investment from present-day levels, whilst maintaining affordability for our customers. We have reported good operational performance in a year of significant strategic change. We have reported a strong set of results. In May, Ofgem agreed to our request to pay £200 million of interconnector profits back ahead of the planned timeframe, as we took action to lower bills for consumers. We are investing around £24 billion over the next five years directly into decarbonising energy networks, starting now. This is measured in accordance with the EU taxonomy, and excludes ‘clean’ spend in areas such as connecting nuclear power and lowering methane emissions through gas pipeline replacement. In every sense, this investment cements our position as The Energy Transition Company. Doing Right Now National Grid is a responsible business, because it is the right thing to do. Our RBR, which is published alongside the Annual Report, details our progress to date on the commitments we set out in our RBC. Communities sit at the heart of our RBC, and I am delighted that our Grid for Good initiative has positively impacted the lives of thousands of young people to date, with participation from hundreds of National Grid volunteers. Grid for Good was created to drive lasting and positive change for disadvantaged young people and we are well on the way to achieving our goal of 125,000 volunteering hours by 2030. Diversity is critical to business success and I am pleased to report this year that we have no material gender pay gap in the UK business. Of course, this is just one measure, and we recognise that there is more work to do to bring greater diversity to all levels at National Grid. 13 S trateg ic R ep o rt National Grid plc Annual Report and Accounts 2021/22 06_CEO_review_p12_14_v46.indd 13 27/05/2022 16:41

In the US, our pay gap sits at 12.6% and we continue to address this as a matter of high priority. I am very clear that we can achieve more with a diverse organisation, and it is vital that we represent the communities we serve. Over the last year, I am pleased to say we have continued to deliver energy reliably, safely and efficiently for our customers in all jurisdictions, and continue to focus on our safety performance. Of course, it would not be possible to deliver these results without the hard work of the teams across the business. I would like to take this opportunity to say a sincere and heartfelt thank you to all National Grid colleagues, who, despite living through the most extraordinary and challenging of times, continue to serve the Company with hard work, dedication and outstanding skill. Looking ahead As we look ahead, we do so with optimism. National Grid is uniquely positioned as The Energy Transition Company, at a time when climate goals, customer demands and geopolitics align on the imperative need to fully decarbonise our economies. In the UK, we will support the government in delivering its British Energy Security Strategy and the ambitious target of delivering 50 GW of offshore wind by 2030, including up to 5 GW floating wind, by developing and delivering transmission project proposals in alignment with the national blueprint. We will work with government and regulators to reform the consenting and regulatory frameworks to deliver the unprecedented levels of new transmission capacity required to deliver the strategy much faster than under the current arrangements. We will complete the integration of WPD into our new Electricity Distribution business and seek a successful outcome in our RIIO-ED2 regulatory process that gives us the flexibility to invest in our distribution networks to support the Strategy and the expected growth in heat pumps, electric vehicles and solar generation. In the US, we will continue the work started to make fossil-free gas a reality on our networks by supporting legislative and regulatory policies to grow fossil-free gas, developing voluntary tariffs for customer participation in fossil-free gas offerings and running neighbourhood pilots for green H2 network blending, networked geothermal, and targeted electrification of heating. National Grid has a key strategic role to play in delivering the legacy of COP26 and we will become even more vocal on this over the next 12 months. We are working side by side with the UK, India and US governments on the Green Grids Initiative to accelerate the decarbonisation of electricity grids globally; we are engaged in the Glasgow Breakthroughs to share learning and drive progress in different sectors; and we will share our views on progress and policy needed globally. We must now move fast to seize the opportunity this decade to keep 1.5°C in sight. We are leading a clean, fair and affordable energy transition across the jurisdictions we serve, and we do so with pride. No one will be left behind. Our pace will accelerate, our efforts will increase, and our action will be bold. The business is positioned for long-term success. John Pettigrew Chief Executive Q&A How can we solve the huge challenge of achieving net zero? Partnership and collaboration hold the key to unlocking some of the biggest global challenges we face. Communities, government, regulators and industry all have a critical role to play in reaching net zero and it is only by working together and challenging each other to be bolder, more innovative, and to deliver at pace that we will achieve this. For the industry, delivering the energy system of the future, while operating and safeguarding the energy system of today, will require a huge shift in mindset. We must rise to this challenge and embrace the opportunity we have to create a fair and affordable future for all. Why did National Grid feel it was important to be a principal partner of COP26? Climate change is the biggest challenge we will face as a society – and there is a ticking clock. National Grid is uniquely positioned to lead the energy transition across the UK and Northeast US, but COP26 gave us the opportunity to go further and to collaborate and learn from partners on a global scale. Why should I invest in National Grid? The fundamentals of our business are strong; they underpin long-term value creation. We are at the forefront of the green revolution. There is huge business opportunity and we are fully aligned with government and societal demands to deliver greener, cleaner energy. We are Doing Right Now. Can you share an update on the transactions? The transactions that we announced in March 2021 and have implemented over the past 12 months represented a strategic pivot for the Company. The acquisition of WPD in the UK, the sale of Rhode Island in the US and an agreement to sell a majority stake in Gas Transmission in the UK, will leave our business split equally between the UK and the US, and with a focus that is 70% on electricity and 30% on gas. This is aligned with our view of the energy transition – gas will continue to have a key role to play, representing around 30% of the energy system by 2050 as we see increased electrification in the journey to net zero. As CEO, what are you most proud of? My colleagues. Living and working through a global pandemic has been challenging for everyone in different ways. I am very proud of the way everyone working at National Grid has carried out their duties with skill and professionalism in the most difficult and extraordinary circumstances to keep the lights on and the gas flowing for our customers. Scan here to view our video 14 National Grid plc Annual Report and Accounts 2021/22 Chief Executive’s review continued 06_CEO_review_p12_14_v46.indd 14 27/05/2022 16:41

Fairness and affordability We are committed to delivering energy safely, reliably and affordably to the communities we serve. As well as affordability, we will play our role in ensuring no one is left behind in the short term due to increased energy prices, or in the longer-term transition to clean energy. £30 – 35bn 2020/21 – 2025/26 investment across our UK and US businesses 2021/22 developments Our response UK Supply and demand mismatches due to factors such as COVID-19 and the conflict in Ukraine have driven surges in energy prices that have challenged many customers; 2021 saw a 330% rise in European gas prices. In February 2022, Ofgem announced a 54% increase in the energy price cap, caused by the record rise in wholesale energy prices. National Energy Action has anticipated that the number of households in fuel poverty will rise from 4.5 million to around 6 million because of the increased cap. As a result, the Treasury announced that households will receive up to £350 of government support to help protect them from the rising energy costs. This includes a £200 discount on electricity bills for all consumers from October 2022, and a £150 council tax rebate from April for 80% of council taxpayers in England based on their tax bands. US Economy-wide inflation has been amplified in the energy sector. The energy price index rose 26% from February 2021 to February 2022, with all major energy component indexes increasing; natural gas and electricity rose 24% and 9%, respectively. COVID-19 also brought serious economic hardship to many of our customers, elevating affordability concerns even further, and many moratoria on disconnection for non-payment have expired. In response, Congress’s American Rescue Plan included an additional $4.5 billion in Low Income Home Energy Assistance Program funding, including $535 million for New York and $187 million for Massachusetts. • We donated £1 million to support the relief effort in Ukraine, split equally between the British Red Cross, the United Nations refugee agency, and UNICEF. • We published our first Responsible Business Report in June 2021, providing an update on commitments in our Responsible Business Charter across five key areas: the environment, our communities, our people, the economy and our governance. • In the UK, our Grid for Good Programme is in its second year of having a positive impact on socio-economically disadvantaged young people during this economic downturn. To date we have helped over 2,750 young people and have over 1,000 National Grid employees registered as volunteers. • Our Electric Transmission business in the UK leveraged new technologies such as deploying soil stabilisation technology that decreased road-building costs by 30% for the Hinkley Connection Project or using drones to inspect overhead power line networks at lower cost and hazard. • WPD announced a £500,000 fund to help those in fuel poverty through the 2021/22 winter period, as part of a wider annual £1 million Community Matters Fund. The Fund supported more than 79 grassroots organisations and local authorities, saving an estimated £2 million for 29,000 people in our communities. • We launched Project C, our community engagement and neighbourhood development programme, across our New York service area. Company employees volunteered at food banks, Habitat for Humanity and Meals on Wheels, and stocked student backpacks and food warehouses, supplied PPE, cleaned up neighbourhoods and parks, offered energy affordability solutions, and much more. • We gained approval from the New York Public Service Commission in January 2022 for our Expanded Solar for All programme through which we will share approximately $800,000 in community solar savings per month with 160,000 low-income to moderate-Income customers, the largest such programme in the country. 15 S trateg ic R ep o rt National Grid plc Annual Report and Accounts 2021/22 Our business environment As well as managing the business through the COVID-19 pandemic, rising living costs, and the conflict in Ukraine, our societal ambition remains to achieve net zero. We will work with governments and regulators in the UK and US to help them meet their own carbon-reduction targets in a fair and affordable way. 07_Our_business_environment_p15_19_v84.indd 15 27/05/2022 16:42

Net zero We are focused on delivering the energy transition while balancing key societal issues for the regions in which we operate. We are continuing to progress towards our own net zero commitment to reduce our greenhouse gas emissions to net zero by 2050. In this ‘critical decade’ (2020 – 2030) for climate action, we are committed to working with governments and regulators in the UK and US to help them meet their carbon reduction targets. Net zero emissions commitment by 2050 2.5 GW new renewable energy connected to our transmission and distribution grids in 2021/22 2021/22 developments UK Along with hosting COP26, the UK has made a binding commitment to net zero emissions by 2050. Additionally, it committed to phasing out inefficient fossil-fuel subsidies in hopes of limiting global temperature rise to 1.5°C. In April 2022, in response to the war in Ukraine, the UK increased its ambition further by publishing the British Energy Security Strategy with the vision to produce 95% of electricity from low carbon sources by 2030. It included targets for 50 GW of wind by 2030, 70 GW of solar by 2035, and an additional 24 GW of nuclear by 2050. The strategy highlighted the critical role of network infrastructure in delivering on its ambitions, including recognising the need for a national planning regime and expedited approvals processes. The UK’s carbon intensity dropped to a record-low 39 gCO2 on 5 April 2021. On that day, over three quarters of the UK’s power came from zero-carbon sources: 39% wind, 21% solar, and 16% nuclear. US The Biden Administration continued to make climate change a top priority for the federal government. The $1 trillion Infrastructure Investment and Jobs Act was passed, providing roughly $550 billion of new federal funding for roads, bridges, transit and other physical infrastructure programmes, and contained several National Grid priorities. The Biden Administration committed the US to the Global Methane Pledge at COP26 to cut emissions 30% by 2030. Offshore wind is a major growth focus for the Biden Administration, with a 30 GW goal by 2030 and 110 GW by 2050. By 2030, New York is targeting 10 GW of solar, 9 GW of offshore wind, and 8 GW of onshore wind, and recently doubled its storage goal to 6 GW. Massachusetts’ goal is to have 8 GW of solar, 4 GW of offshore wind, and 2.8 GW of storage by 2030. National Grid booth at COP26 in Glasgow, Scotland, UK 16 National Grid plc Annual Report and Accounts 2021/22 Our business environment continued 07_Our_business_environment_p15_19_v84.indd 16 27/05/2022 16:42

Our response • We sponsored COP26 as a principal partner, leading the conversation and working closely with the UK government and other sponsors to create a successful and ambitious climate change conference in November 2021. • In April 2021, our commitments to reduce our emissions in line with climate science were approved by the United Nations’ Science Based Targets initiative (SBTi). The targets we have set are consistent with the reductions required to keep warming to well below 2°C. We have also identified where we can accelerate our targets further. • We worked with the Electric Power Research Institute, the Gas Technology Institute and other utilities to sponsor the Low-Carbon Resources Initiative to accelerate the development and demonstration of low-carbon and zero-carbon energy technologies. • With 60% of all offshore wind developments in the UK planning to bring their energy onshore through the East Coast, we progressed projects such as the one in Yorkshire Green to increase capacity and relieve constraints on the network. • We worked with industry players to support decarbonisation projects in heavy industry in Humber and Teeside. The East Coast Cluster won a bid to be one of the UK’s first two industrial carbon capture clusters, and it has the potential to transport and store 50% of all UK industry carbon emissions securely, up to 27 million tonnes of CO2 emissions a year by 2030. • We worked with Hitachi Energy in a pilot project at Richborough Substation in Kent to replace sulphur hexafluoride (SF6) gas with a greener alternative. This change forms part of our ambition to reduce SF6 emissions by 50% by 2030 and remove SF6 gas from our electricity assets by 2050. • WPD published an environment strategy in April 2021 that details commitments to ensure environmental responsibility underpins all its activities in RIIO-ED2 and beyond. It provides an overarching pathway to achieving net zero by 2028 (excluding network losses), ahead of the government’s target date of 2050. • We announced our vision for a fossil-free future, fully eliminating fossil fuels from our US gas and electric systems, enabling the customers and communities we serve to meet their heating needs without using fossil fuels by 2050. Our plan is based on energy-efficient buildings, a 100% fossil-free gas network, hybrid electric-gas heating systems, and targeted electrification and networked geothermal. • We joined seven major US utilities in the Electric Highway Coalition, which will enable more electric-vehicle charging stations along highways across the US. • In June 2021, we commenced operations of two solar projects totalling 40 MW in Michigan. These employed over 150 workers from communities within 100 miles of each site during construction. Onsite gas cart used to retro fill existing gas-insulated, high-voltage switchgear, with an alternative low global warming g3 gas, designed for high-voltage transmission equipment, Richborough Substation, Kent, UK 17 S trateg ic R ep o rt National Grid plc Annual Report and Accounts 2021/22 07_Our_business_environment_p15_19_v84.indd 17 27/05/2022 16:42

Decentralisation The energy system continues its transition from high to net zero carbon. This change coincides with a shift to more decentralised resources, including renewables and battery storage. As the volume of this intermittent and distributed generation increases, a more resilient and flexible system will be required; one that makes best use of available energy resources to meet consumers’ needs in a balanced, efficient and economical way. 30% of generation in the UK is connected at the distribution level 11% of generation in Massachusetts and New York is connected at the distribution level 2021/22 developments Our response UK Europe is projected to decentralise faster and further than any other region between now and 2050. The median power plant in Europe could reduce in size by up to 95% due to the scale of distributed generation. Decentralised electricity systems are increasingly made possible by developments in smart systems and flexibility solutions, and supported by local initiatives to develop decarbonisation pathways. This increasingly decentralised network presents a paradigm shift for the ESO as we work to enable the transition away from a system developed for a small number of large generation plants. The ESO will continue to innovate to enable Great Britain’s electricity system as it transitions to becoming a separate, independent public corporation known as the Future System Operator. The six UK DNO groups submitted their RIIO-ED2 business plans in 2021, describing the role of decentralised electricity systems in achieving net zero, including the role of the distribution system operator in the future. US The US is seeing one of the highest levels of grid investment in the world to meet demand for more decentralised assets such as distributed generation and electric vehicle charging. In Massachusetts, the Department of Energy Resources officially approved the doubling of the current solar programme to 3.2 GW. The Department of Public Utilities passed a provisional programme regarding cost allocation to support distributed generation. The state also allocated $13.1 million in grants to install 306 direct current fast charging electric vehicle charging ports at 150 locations. New York’s Governor called for a doubling of the energy-storage target to 6 GW by 2030 and intends to establish a world-class battery research and manufacturing centre. Proposals also included a $1 billion investment to support electric vehicle (EV) adoption and charging; $500 million to develop offshore wind supply chains and port infrastructure; and the creation of a green hydrogen hub to compete for $10 billion federal funding. • In the UK, we are running three Network Option Assessment Pathfinder projects to pilot innovative ways to ensure grid reliability as we prepare to operate a zero-carbon grid by 2025. • We connected 406 smaller, distributed generation customers to the network in the UK, double the number we connected two years ago. • The Equitable Novel Flexibility Exchange (Equinox) project allows WPD customers with heat pumps in their homes to participate in a flexible energy future. This project will assist in the deferral or avoidance of network reinforcement due to the predicted high uptake of heat pumps in the upcoming RIIO-ED2 and beyond. • WPD published reports for each local authority as part of the Distribution Future Energy Scenarios process, outlining the expected uptake of different demand and generation technologies at a decentralised level. The reports are used to assist local stakeholders with local area energy planning and for WPD to identify areas of strategic investment in the distribution network. • We connected 207 MW of distributed energy resources in New York in 2021. This is the most distributed generation we have ever connected and earned us the maximum incentive payment. • Funding was approved for our Active Resource Integration pilot by New York’s Public Service Commission. This aims to reduce interconnection costs for up to 15 MW of distributed solar projects. • We began construction on the New York Energy Solution project to address bottlenecks between demand and distributed renewable generation in New York, enabling further decentralisation. • We secured $150 million of funding in a joint venture with Emerald Energy Venture to support growth in our distributed renewable energy portfolio. • We have entered a partnership with Massachusetts-based Form Energy to work on breakthrough long-term energy storage and invested in Viridi Parente’s innovative high-density storage technology. 18 National Grid plc Annual Report and Accounts 2021/22 Our business environment continued 07_Our_business_environment_p15_19_v84.indd 18 27/05/2022 16:42

Digitalisation Our digital aspiration is to be an intelligent connected enterprise bringing customers, employees and assets together to create the most resilient and secure utility. Our vision is to create insights from a single source of consumable and consistent data. $345m National Grid Partners’ investment in companies whose transformational technologies are making grids greener and more resilient 2021/22 developments Our response Frontier technologies such as connected sensors, appliances and devices have exceeded the number of people on the planet in 2021. Additionally, the declining cost of computer storage is enabling the management of large volumes of data. Customers desire a seamless experience, though only 21% felt their utility provider made life easy for them in 2021. Effective digital transformations of utilities across the globe are enabling them to decarbonise, decentralise and democratise energy resources. Driven by increased regulator demands, these trends are accelerating in utilities, driving 20% annual growth in global investment in digital electricity infrastructure and software for the past few years. • We developed WhenToPlugIn, a new online application in the UK that suggests how to reduce consumers’ carbon footprints by identifying periods of the day to use appliances when the energy mix is dominated by renewable and low- carbon sources. • The launch of the Connected Data Portal enabled WPD to become the first UK DNO to provide all customers and stakeholders with open access to its data, further digitalising customer interactions in areas such as applications for new connections and flexibility service provision. • We launched the new My Account page to streamline US users’ digital experience across any device, enabling electric and gas customers to view energy use, manage account information and enrol in programmes. • We began using satellite imagery and AI in the US to optimise vegetation management. North Sea Link goes live The North Sea Link is our latest interconnector to go into operation. It is a joint venture with the Norwegian system operator, Statnett, and cost €1.6 billion over six years to build. The 1,400 MW link stretches 447 miles (720 kilometres) between the UK and Norway under the North Sea, and can power approximately 1.4 million homes. Enabling the trade of renewable energy will help reduce the UK’s carbon emissions by 23 million tonnes of carbon by 2030, save customers money, and bolster energy security. WPD and ET response to Storm Arwen Winds of over 92 miles per hour (148 kilometres per hour) and heavy snow hit the UK in November 2021, impacting electricity distribution and transmission. All four of WPD’s distribution networks were affected, requiring power restoration to over 243,000 properties, answering 98,745 customer calls, and resolving over 1,600 incidents. Our transmission network was also affected, with 45 network faults reported. Fortunately, our automatic protection mechanisms worked well to deal with the faults reported. Overall, well-versed preparation, action and communication resulted in a successful response in our service areas to the worst storm to affect power supplies in 15 years. Offshore wind lease awarded in the New York Bight In February 2022, the Bureau of Ocean Energy Management hosted the country’s largest offshore wind lease auction to date for seabed development rights between New York and New Jersey. In partnership with RWE, we won the largest of the six sites. The awarded area has the potential to host 3 GW of capacity, enough to power over a million homes. The joint venture, Community Offshore Wind, combines RWE’s world-leading offshore wind capabilities with our local expertise in the Northeast and experience with High-Voltage Direct-Current interconnectors. This award supports both companies’ efforts to advance a clean energy future and achieve our states’ offshore wind and climate targets in the coming decades. North Sea Link – specialist barge laying undersea cable in Norway Case studies 19 S trateg ic R ep o rt National Grid plc Annual Report and Accounts 2021/22 07_Our_business_environment_p15_19_v84.indd 19 27/05/2022 16:42

Strategic priority Enable the energy transition for all Deliver for customers efficiently What this means We will increase the positive impact we have on society, environmentally and socially, primarily through enabling a transition to a clean energy future. By innovating how our networks deliver energy, investing for a changing climate and influencing policy and regulation, we will enable clean electricity, heat and transport, and promote better outcomes for all where we develop skills and where no one is left behind. Business environment link: Delivering safe, reliable, resilient and affordable energy for customers in our communities has always been at the heart of what we do. As we invest to decarbonise the energy system, using our operational excellence and financial discipline to keep bills affordable for customers is more important than ever. Business environment link: 2021/22 achievements • We received the prestigious climate change ‘A’ score from CDP Climate Change for the sixth consecutive year for our corporate sustainability work in cutting emissions and moving towards a low-carbon economy. • We have 22 GW of renewables connected to our UK and US electricity transmission and distribution networks. • Ofgem’s strategic innovation fund awarded us £400,000 for three projects that will help develop a net zero electric transmission network, including replacing SF6 with a low-carbon alternative and utilising satellite data analytics to future-proof against the impacts of climate change. • WPD is the only DNO to fit three-phase services as standard to all new connections, boosting capacity for EVs and heat pumps. • In the US, our onshore renewables team has secured over 2 GW of power offtake agreements with partners such as Walmart and Home Depot. • We started operations of the 200 MW Prairie Wolf Solar Project in Illinois, which is projected to offset 285,000 tonnes of CO2 annually. • The New York Power Authority partnered with us in May 2021 on the Smart Path Connect project to rebuild 110 miles of transmission lines. This will support existing renewable resources and result in production cost savings, emissions reductions and decreases in transmission congestion. • The Edison Electric Institute (EEI) announced us as a recipient of its Emergency Response Award and the Emergency Recovery Award, recognising recovery and assistance efforts following service disruptions caused by extreme weather or other natural events. • We launched the Digitalising Work Management app across 50 Electricity Transmission operations sites in the UK to schedule, dispatch and complete work more efficiently. • WPD achieved the British Institution Standard for Inclusive Service Provision for the ninth year running and was re- accredited with the Customer Service Excellence Standard. • We successfully reached new agreements in regulatory rate cases across our US service areas to continue to serve our customers. • In the US, we were honoured with the ReliabilityOne award for Outstanding Reliability Performance from PA Consulting, recognising reliable electric service, technology and innovation, and customer engagement. • We launched a revamped bill assistance campaign in the US to remind customers about the services and programmes we offer during prolonged cold weather or increasing energy prices. Key highlights 19.5 GW of wind power on Britain’s electricity system on 29 January 2022, setting a new wind power record 99% of our UK customers affected by the worst storm to affect power supplies in 15 years had power returned within 48 hours Looking ahead • We are developing a Cap and Floor regulatory regime with the UK Department for Business, Energy & Industrial Strategy and Ofgem to apply to future multi-purpose interconnectors. This will reduce the number of radial connections limiting distribution to coastal communities, providing significant cost reductions for consumers, and enable wind developers to access multiple markets. • The Hinkley Point connection transmission project we are developing will enable six million homes to access low- carbon electricity. • WPD will work to ensure the network is ready to enable stakeholders to achieve their net zero ambitions. It will prepare the network for at least 1.5 million additional EVs, 600,000 heat pumps and a significant increase in renewable energy over the next six years. • In the US, we will be working with stakeholders to build towards an integrated clean gas and electric system that would eliminate fossil fuel gas from both the gas delivery and electric systems, as the most practical and affordable path for our customers. • In our US jurisdictions, we have committed to 20,000 EV charging points by 2025 and have applied for funding for an additional 32,000 in Massachusetts. • Customer focus is something we will continue to improve, building on best practice through our US Customer team and learning from WPD’s excellence in customer service. • We have committed to 5,000 volunteer hours in the US and $5 million annually to community organisations for the next decade. • For RIIO-ED2, WPD intends to ensure that power cuts will be at their lowest ever levels and customer satisfaction will be at its highest at over 93%. Crucially, it will achieve all of this whilst maintaining affordability for its customers. Further reading: Internal control and risk management on pages 28 – 32 20 National Grid plc Annual Report and Accounts 2021/22 Our vision is to be at the heart of a clean, fair and affordable energy future. To deliver our vision in a focused way, we have a strategy which sets the bounds of our business, guided by four strategic priorities. Succeeding with our strategy 08_OurStrategy_Innovation_KPI_p20_27_v112.indd 20 27/05/2022 16:44

Strategic priority Grow our organisational capability Empower colleagues for great performance What this means In the context of a rapidly changing energy sector, we will need to build on and evolve our organisational capabilities. We will digitally transform our processes, strengthen our customer focus and sharpen our commercial edge. To successfully make this transformation and achieve results, our ability to implement change effectively will be paramount. Business environment link: All our people shape the culture and ways of working needed to perform and achieve outcomes that will exceed all our stakeholders’ expectations, including those of customers, communities, regulators and investors. Our leaders will encourage people to be at their best when it matters. From attracting diverse talents, developing our people and recognising great achievements, we will ensure our colleagues are engaged and able to work towards a clean energy future. Business environment link: 2021/22 achievements • At COP26 we launched the AiDash satellite tech partnership to improve the green value of our sites. • We began creating a digital copy of Great Britain’s energy system, a central tool that brings together every element of our system to create a collective and dynamic view. The virtual environment allows for testing and modelling to make accurate forecasts which enables commercial decision making and understanding of the impact for customers. • WPD has conducted significant roll-out of innovative flexibility initiatives, including procurement of flexibility services via the Flexible Power brand, which has procured 270 MW of flexibility services during 2021/22, affecting 2.4 million customers and achieving £49 million of deferred or avoided reinforcement. • In the US, we launched Pathfinder, a custom end-to-end solution that digitises and streamlines field force work, enabling work assignment, scheduling, dispatch, field work, data capture, tracking and reporting. • We signed an offshore partnership agreement with RWE Renewables to successfully bid jointly in the New York Bight seabed lease auction. Fifty people worked collaboratively across companies. • We were named in the Top 10 Outstanding Employers list by the Ethnicity Awards, which recognise companies working to ensure all people are afforded equal opportunity, regardless of race or ethnicity. • We launched MyHub Mentoring, our new mentoring programme that connects our experienced and skilled leaders with colleagues looking to develop professionally in specific areas. • We launched the ‘Grid Guide to Our People: Inclusion and Diversity’ podcast. • We were ranked 1st in the UK and 3rd globally for gender equality in a report published by Equileap. • As a diversity and inclusivity measure, WPD signed up to participate in the 10,000 Black Interns programme, which aims to help transform the prospects of young black people in the UK by offering internships to black students. • In the US, we received a score of 100 on the Human Rights Campaign Foundation’s 2022 Corporate Equality Index, and were named the Best Place to Work for LGBTQ Equality. • We signed up to the Valuable 500 initiative, in line with a core focus of our Responsible Business Charter: strengthening diversity and representation of the workforce. This initiative puts disability on the business leadership agenda with the aim of catalysing inclusive action. Key highlights 6 GW of network boundary capacity in the UK 46% of our Board seats are held by women Looking ahead • We will be a leader in pioneering smarter, low-carbon energy networks which at their core are made of resilient transmission and distribution grids. Our focus now is on building the diverse pipeline of employees that will get us to net zero. • The UK energy industry needs 400,000 additional people in new and existing jobs by 2050. • WPD is forecast to avoid £94 million of network reinforcement costs by using flexibility services. • We will continue to establish our purpose, vision and values, and reinforce our third value to ‘make it happen’. • We strive to achieve 50% diversity in all new talent programmes by 2025. • We will look to be included in the 2022 Bloomberg Gender- Equality Index, which tracks transparency in gender reporting. • WPD plans to demonstrate exceptional and embedded employment practices by achieving Gold accreditation with Investors in People by the end of RIIO-ED2. 21 S trateg ic R ep o rt National Grid plc Annual Report and Accounts 2021/22 08_OurStrategy_Innovation_KPI_p20_27_v112.indd 21 27/05/2022 16:44

The ESO manages the supply and demand to meet the needs of Great Britain, but it also has a clear mission: to decarbonise the energy system and bridge the gap to net zero. Continuing to innovate and adapt the energy system will require a range of new tools and a reimagining of how the entire industry can come together to have a lasting impact. To achieve this, in 2021, the ESO launched an ambitious, industry-wide mission to digitalise our energy system by constructing real-time digital twin replicas of our entire energy landscape, working in parallel to our physical system, thereby creating a virtual environment through which we can share data and model and test scenarios to make our decision making more robust. This will create valuable insight to help guide and govern how we generate, manage, store and consume energy, helping us make better decisions for Great Britain’s aim of achieving net zero targets more quickly and efficiently. On 1 December 2021, along with panellists from across Ofgem, BEIS, the Energy Digitalisation Taskforce, Energy Systems Catapult and more, the ESO hosted a one-day conference for the energy industry and wider stakeholders to find out more about the programme, and how to get involved. A series of advisory groups and engagement opportunities are taking place throughout 2022. Virtual Energy System in ESO WPD has started its largest vulnerability Network Innovation Allowance (NIA) funded project, focusing on developing ways to predict consumer vulnerability and ensure we can target our support and investment in our communities, or even households, that need it most. Working with our partners, the community energy group WREN, Frazer-Nash Consultancy and Frontier Economics, we are looking at how WPD can support vulnerable customers. We are assessing which commercial models would work best to: enable fuel poor consumers to participate in the decarbonisation of the energy system so as to benefit the community and achieve net zero; explore whether we can use smart meter data to identify vulnerable customers, and thus enable us to target support to those in our communities where it would be most effective and who need it most; and the effect of changes in electricity use as a result of the pandemic and whether, for instance, the shift to home working will have an impact on customers in vulnerable situations. WPD Innovation Engineer, Stuart Fowler said: “VENICE is no ordinary innovation project – it will shine a real light on energy use and help us to reach out to the people who need it most.” Vulnerability and Energy Networks, Identification and Consumption Evaluation (VENICE) in UK Electricity Distribution National Grid’s Deeside Centre for Innovation in North Wales has facilities set up ready for industry participants to trial and assess new technological developments before they go into service on the network. This unique environment allows designs to be validated under more realistic conditions than have been available ever before, with equipment being tested at 4,000 A and up to 600 kV outside of laboratory conditions, in an outdoor environment for extended periods of time – days, months or even years. UK ET is currently trialling two new innovative projects to cut harmful environmental emissions. Working with UK-based Rawwater, we have started work on delivering a novel method of sealing harmful environmental SF6 leaks by reducing emissions from small-bore pipework. Another key innovation project currently underway is the testing of a new patented concrete mixture called Cemfree (owned by DB Group), which potentially has a carbon footprint of 80% less than conventional types. Typical barriers to adoption of innovative concrete products include how they will behave on site and long-term durability. To address this, UK ET is currently testing two large-scale slabs (c.50 cubic metres) to identify the differences in performance between Cemfree and a conventional concrete. Deeside Centre for Innovation – UK ET Deeside Centre for Innovation, North Wales, UK 22 National Grid plc Annual Report and Accounts 2021/22 Our commitment to net zero continues to shape our innovation strategy, with our key aim being to deliver cleaner and cheaper energy. Our innovation and Research and Development (R&D) portfolio enables us to identify and target carbon savings for our own operations and we are also developing innovation projects to ensure we are prepared for, and play a pivotal role in, the decarbonisation of energy for power, heat, transport and industry. We place a high value on collaboration to inform, generate ideas and solve the challenges we see ahead of us, and we work with technical organisations, academia and suppliers in the energy sector that align with our goals and objectives. We set out here some of the key innovation projects our business units have been working on over the financial year. In addition, NGP, our corporate investment and innovation arm, continued to progress investments in emerging technologies and embedded these innovations across our US and UK core operations. You can find more detail about our R&D portfolio for our business units on pages 264 to 267. Innovation 08_OurStrategy_Innovation_KPI_p20_27_v112.indd 22 27/05/2022 16:44

NGP, our corporate investment and innovation arm, continued achieving impact for the Group by investing in emerging technologies such as AI, data security and cyber security, and embedding these innovations across our US and UK core operations. NGP’s portfolio as at 31 March 2022 comprised 38 companies and four fund investments at a fair value of $491 million. During the past fiscal year, NGP invested in 13 new startups – AptEdge, Baffle, Cogniac, Compute North, Cyolo, Finite State, Incorta, Pathr, Risilience, Sensat, Sync Computing, TS Conductor and Viridi Parente – whose technology can make power grids greener, more secure and more customer friendly. Existing portfolio company Dragos announced a $200 million funding round in which NGP participated as a returning investor. The Series D round is believed to be the largest ever for an operational technology (OT) cyber security company. NGP first invested in Dragos in 2018, when National Grid began using the company’s industrial threat intelligence service to monitor global threats to industrial control systems. NGP continues to build use cases of its portfolio innovations across our core businesses. Working with NGP portfolio company Cogniac, for example, National Grid Metering is using AI to train an AI model to identify different makes and models of gas-meter regulators (which may benefit from early replacement), using a variety of photographs taken from multiple angles and in various lighting conditions. This is increasingly critical for keeping customers safe and warm. More than 70% of NGP’s portfolio companies have strategic engagements with National Grid to help transform our operations – such as AiDash, which combines satellite data and AI to protect critical infrastructure. After a successful deployment in our US service territories to spot overgrown vegetation that can spark outages or fires, at COP26 AiDash unveiled an environmental stewardship product developed with National Grid and NGP’s Innovation team. In November, at COP26 in Glasgow, NGP hosted the Innovating our Way to Net Zero panel discussion with National Grid CEO John Pettigrew and the chief executives of Edison International and the Electric Power Research Institute on how corporate investments in startups can supercharge new clean energy technologies. Additionally, NGP’s NextGrid Alliance (NGA) continues to grow from 60+ member utilities at its launch in 2020 to 80+ global utility companies today. Nearly half the world’s regulated energy utilities have participated in NGA workshops in the past year to help advance innovation and accelerate the decarbonisation transition. NGP launched a new online community for Alliance members, at ngalliance.energy, in November. Since its launch in November 2018, NGP has led more than 50% of its startup investment rounds and achieved four portfolio exits – including October’s initial public offering of Vancouver-based Copperleaf Technologies, which helps National Grid and other critical infrastructure companies ensure their capital spending generates the highest strategic value, including planning for net zero. Framing the pathway to the energy transition is a combination of looking at the mega trends known as the three Ds: digitalisation, decentralisation and decarbonisation. Getting there will require enabling technologies like iOT, data analytics, storage cloud, cyber security, and, in turn, investment in areas such as asset modernisation, increased customer focused solutions and smart enterprise. More details can be found at ngpartners.com, including details of each of our portfolio investments. National Grid Partners We are excited to have launched the HyGrid project, the largest green hydrogen-blending project for direct use by utility customers in the northeastern US and one of the first in the country. In the town of Hempstead on Long Island, HyGrid is expected to heat approximately 800 homes and fuel 10 municipal vehicles at no additional cost to customers. Much of the equipment required to create zero-carbon hydrogen is already in place at the site; this includes existing wind and solar equipment for generating hydrogen fuel for vehicles, and an adjacent National Grid facility that provides energy for the local neighbourhood. Rudy Wynter, President of National Grid New York, said: “We believe that hydrogen can transform the energy industry, and we are at the forefront.” HyGrid – hydrogen blending project in New York FLISR is a scheme-based system that monitors and responds to electrical faults along our networks. It identifies and isolates the location of a fault to minimise impact to the grid and the number of customers affected, while enabling a speedier return to service for uninvolved customers when this is safely possible. Creating FLISR capabilities involves installing reclosers and feeder monitors at substations, with preprogrammed logic, to enable near real-time responses to faults. The technology was installed as part of the Advanced Data Analytics programme. In the midst of the 2021 nor’easter, the FLISR scheme was active on feeders from West Salem and Saugus in the North Shore District in New England. A tree limb created a mainline fault condition between the West Salem substation circuit breaker and the first downstream pole-top recloser on the line. FLISR logic was activated and quickly restored service to 1,531 customers in 16 seconds. The remaining 2,356 customers experiencing the outage had their service restored in 141 minutes after the repairs to the feeder were completed. Had this FLISR scheme not been implemented, all 3,887 customers would have experienced the full outage. Fault Location, Isolation and Service Restoration (FLISR) in New England FLISR: installation of recloser. New England, US 23 S trateg ic R ep o rt National Grid plc Annual Report and Accounts 2021/22 08_OurStrategy_Innovation_KPI_p20_27_v112.indd 23 27/05/2022 16:44

Enable the energy transition for all Grow our organisational capability Deliver for customers efficiently Empower colleagues for great performance Indicates an alternative performance measure Link to strategy Financial measures Link to remuneration Remuneration of our Executive Directors, and our employees, is aligned to successful delivery of our strategy. We use a number of our KPIs/ alternative performance measures as specific measures in determining the Annual Performance Plan (APP) and Long-Term Performance Plan (LTPP) outcomes for Executive Directors. While not explicitly linked to APP and LTPP performance outcomes, the remaining KPIs1 and wider business performance are considered. For further detail, please see our Directors’ Remuneration Report, on pages 108 – 131. Strategy link KPI and performance Progress in 2021/22 Group RoE (%) In calculating Group RoE, we measure 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 the regulated businesses, NGV and Other activities and joint ventures. Target: 9.75 – 11% each year 11.4 10.6 12.0 2021/22 2020/21 2019/20 Group ROE of 11.4% was higher than 2020/21 (10.6%) with higher regulated financial performance mainly due to the acquisition of WPD and an improved contributions from our non-regulated businesses mainly due to higher interconnector revenues. Total regulated asset growth (%) Maintaining efficient growth in our 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 investment for a changing climate, enabling clean electricity, heat and transport. Target: 6 – 8% growth each year 8.7 5.6 9.0 2021/22 2020/21 2019/20 Asset growth during the year was 8.7% (2020/21: 5.6%). Capital investment of £7.0 billion (including UK GT), driven by the growth in WPD, along with higher RAV indexation (due to higher inflation) resulted in this increase. Asset growth in 2020/21 was adversely impacted by lower RAV indexation and the impact of COVID-19. Cumulative investment in delivering new low-carbon energy sources (£m) We invest in new low-carbon energy sources primarily through our interconnector businesses (North Sea Link, IFA, IFA2 BritNed and Viking Link), investments in, and partnerships with, companies delivering low-carbon energy sources (for example, our partnership with Sunrun) and investments into large-scale renewables (for example, our new investment in NGR). 2,610 1,874 1,440 2021/22 2020/21 2019/20 Investment in delivering new low carbon energy sources increased in the year by £300 million (69%), largely driven by investment in US Offshore Wind (purchase of 3.2 GW seabed lease) and increased investment in onshore renewables, with the latter reflecting the construction of the Noble and Yellowbud projects. PwC Assured Data Denotes information subject to limited assurance by PricewaterhouseCoopers LLP see page 61 for full definition. 1. Two of our previously reported KPIs: Contribution of our corporate responsibility work and Education, skills and capabilities, have been retired as similar metrics are reported in our RBR. 24 National Grid plc Annual Report and Accounts 2021/22 The Board uses a range of metrics¹, reported periodically, against which we measure Group performance. These metrics are aligned to our strategic priorities. Key performance indicators

Financial measures continued Non-financial measures Strategy link KPI and performance Progress in 2021/22 Cumulative low-carbon generation connected to our UK ET network (GW) Low-carbon generation supported by our network to date. 20.9 19.0 18.0 2021/22 2020/21 2019/20 A total of 20.9 GW of low-carbon generation is currently connected to our network, following additional offshore wind capacity connecting at Triton Knoll (540 MW), Hornsea 2 (1320 MW) and Lincs Offshore Wind farm (9 MW). The government’s 10 point plan alongside the new Energy Strategy and commitment to annual Contract for Difference (CfD) allocation rounds, indicates further increases in low-carbon capacity over the coming years. Connections of renewable schemes to US electric distribution network (MW) The table represents the amount of customer-owned renewable energy capacity installed on our distribution network across our US footprint. Given the variability and unpredictability of customer-driven projects, the Company does not presently have a MW target. Current targets primarily focus on regulatory compliance and customer need date attainment. 569 470 329 2021/22 2020/21 2019/20 The Company interconnected 569 MW of distributed renewable energy resources in 2021/22 across our service territory, an all-time high and a 20% increase compared with the previous fiscal year. The Company interconnected a record number of distributed renewable energy applications in 2021/22 across our service territory, totalling to 13,400 applications. The State of Massachusetts, New York and Rhode Island installed a record amount of distributed renewable energy capacity (216 MW, 244 MW and 109 MW respectively). Cumulative low-carbon generation connected to our UK Electricity Distribution network (GW) Low-carbon generation connected to our UK ED network, to date. 6.7 6.2 6.2 2021/22 2020/21 2019/20 A total 10.2 GW distribution generation is connected to our network to date, of which 6.7 GW is low-carbon generation. This includes biofuels, wind, solar, hydro and storage. Further reading: You can find out additional detail to support some of these KPIs in our Responsible Business Report. This document can be found by visiting: nationalgrid.com/responsibility Strategy link KPI and performance Progress in 2021/22 NGV capital investment (£m) NGV is focused on investment in a broad range of energy businesses across the UK and US, including our interconnector business, large-scale renewable generation, LNG storage and regasification, and energy metering. 913 530 2021/22 2020/21 NGV capital investment, including Long Island Power Authority (LIPA) Gen (‘Genco’) has increased year-on-year by £383 million (72%). This is principally due to investment in US offshore wind (purchase of 3 GW seabed lease), increased investment in onshore renewables, reflecting the construction of the Noble and Yellowbud projects, and the Cap.25 project within Grain LNG. Prior year data has been restated to include Genco and exclude NG Metering. This is to align to NGV’s current structure. 2019/20 data is not included to align with the data in the financial statements. 25 S trateg ic R ep o rt National Grid plc Annual Report and Accounts 2021/22

Strategy link KPI and performance Progress in 2021/22 Climate change – Scope 1, 2 and 3 emissions This is a measure of our reduction of Scope 1, Scope 2 and Scope 3 emissions of the six primary Kyoto greenhouse gases. Our target is to reduce our combined Scope 1 and 2 greenhouse gas emissions by 80% by 2030, 90% by 2040 and to net zero by 2050, compared with our 1990 emissions of 21.6 million tonnes1. Furthermore, we target reducing our Scope 3 emissions by 37.5% by 2034 from 2019 emissions of 33.2 million tonnes. The percentages in the chart below reflect a reduction in our Scope 1 and 2 emissions, from the relevant baseline. The figures are million tonnes of CO2 equivalent. 7.5265% 68% 70% 6.9 6.5 2021/22 2020/21 2019/20 The figures in the chart below represent our Scope 3 emissions and are million tonnes of CO2 equivalent. 30.1 28.9 30.8 2021/22 2020/21 2019/20 1. This 1990 baseline will be updated to reflect portfolio changes in 2022/23. The 1990 baseline does not include emissions from our newly acquired UK ED business (WPD). 2. PwC Assured Data: total Scope 1 and 2 emissions only. Further reading You can read more about the Task Force on Climate-related Financial Disclosures and our wider sustainability activities and performance on pages 70 – 83. Our Scope 1 greenhouse gas emissions for 2021/22 equate to 5.3 million tonnes of CO2 equivalent (2020/21: 4.7 million tonnes) and our Scope 2 emissions (including electricity line losses) equate to 2.2 million tonnes (2020/21: 2.2 million tonnes). This is a total of 7.5 million tonnes of CO2 equivalent for Scope 1 and 2 emissions. These figures include line losses and are equivalent to an intensity of around 411 tonnes per £1 million of revenue (2020/21: 467 tonnes). Our Scope 3 emissions for 2021/22 were 30.0 million tonnes of CO2 equivalent (2020/21: 28.9 million tonnes). 75% of Scope 1 and 2 emissions were in our US business, with 25% in the UK. For our Scope 3 emissions, 91% were in our US business with 9% in our UK business. Our total energy consumption is 3,502 GWh where the UK and US are responsible for 2,341 GWh and 1,161 GWh respectively. This excludes fuels consumed for power generation in the US which is 19,610 GWh and system losses which are 11,117 GWh. We measure and report in accordance with the World Resources Institute and World Business Council for Sustainable Development Greenhouse Gas Protocol. Scope 1, 2 and 3 emissions are subject to independent limited assurance against ISAE 3410 Assurance Engagements on Greenhouse Gas Statements. This data complies with the UK government’s Streamlined Energy and Carbon Reporting (SECR) requirements. For further detail, please see page 68. Network reliability We aim to deliver reliability by planning our capital investments to meet challenging demand and supply patterns, designing and building robust networks, having risk-based maintenance and replacement programmes, and detailed and tested incident response plans. We measure network reliability separately for each of our business areas. The table below represents our performance across all our networks in terms of availability. % 2021/22 2020/21 2019/20 UK Electricity Transmission 99.99993 99.99997 99.99997 UK Gas Transmission 100.00000 100.00000 99.99960 UK Electricity Distribution 99.99469 99.99455 99.99469 NE Electricity Transmission 99.97636 99.95428 99.91471 NY Electricity Transmission 99.95261 99.95429 99.98194 NE Electricity Distribution 99.92725 99.91239 99.95205 NY Electricity Distribution 99.95681 99.92788 99.93180 Interconnector availability IFA interconnector 61.3 95.4 91.4 IFA2 interconnector 90.4 96.5 — BritNed interconnector 80.4 75.1 98.6 NSL interconnector 63.3 – – Nemo Link interconnector 99.0 99.2 96.1 In both the UK and US, we continued to maintain high levels of reliability on all our networks. The fire at our IFA interconnector resulted in reduced capacity. The NSL interconnector started commercial operations in 2021/22. Non-financial measures continued 26 National Grid plc Annual Report and Accounts 2021/22 Key performance indicators continued 08_OurStrategy_Innovation_KPI_p20_27_v112.indd 26 27/05/2022 16:44

Strategy link KPI and performance Progress in 2021/22 Customer satisfaction We measure customer and stakeholder satisfaction, while also maintaining engagement with these groups and improving service levels. 2021/22 2020/21 2019/20 Target UK Electricity Transmission (/10) 7.78 8.4 8.2 7.78 UK Electricity System Operator (/10) 7.3 7.5 7.6 8.15 UK Electricity Distribution 9.03 9.18 9.11 — UK Gas Transmission (/10) 8.6 8.2 8.0 7.9 NE residential — Customer Trust Advice survey (%) 59.9 63.3 55.0 — NY residential — Customer Trust Advice survey (%) 64.3 68.1 63.1 — Metering NPS score (index) +53 +61 +40 — 2021/22 was the trial year for the UK ET Quality of Connections Incentive introduced by Ofgem. This measures key touchpoints throughout the Customer Connection journey and gives us the ability to target specific areas of improvement. UK ET and GT figures represent our baseline targets set by Ofgem for reward or penalty under RIIO-T2 (maximum score is 10). Prior year information is based on RIIO-T1. The change in target in 2021/22 reflects the new Incentive mechanism and change in methodology going forward. The US metrics measure customers’ sentiment with National Grid by asking customers their level of trust in our advice to make good energy decisions. These metrics are tied to the value customers feel they receive from National Grid. The NPS score reported represents the UK metering business. Although this has seen a decline in 2021/22, action plans are in place to improve the score, going forward. Group lost time injury (LTI) frequency rate (LTIs per 100,000 hours worked) 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. Target: <0.1 LTIs 0.13 0.10 0.13 2021/22 2020/21 2019/20 As at 31 March 2022, our Group lost time injury frequency rate (LTIFR) was 0.13, which is higher than the Group target of 0.10. This is a combined employee and contractor LTI rate, which reflects our continued focus on encouraging good safety behaviours across the entire workforce. This result excludes WPD data which can be found on page 51. We are working to harmonise WPD’s LTIFR records for data collection, with those of the Group. We have had a number of disappointing months regarding incidents, the proportion of which relate to slips trips and falls and musculoskeletal strains and twists, where lack of concentration and complacency play a part. In recent months, we completed a review of safety and we are using the outputs to define a Group-wide programme to address these going forward. The programme will include focus on effective behavioural programmes. The 2019/20 result has been restated. The change results from a review of data collation processes that identified a small anomaly regarding collation of hours worked information Employee engagement index (%) This is a measure of how engaged our employees feel, based on the percentage of favourable responses to questions repeated annually in our employee engagement survey. Our target is to increase engagement compared with the previous year. 81 81 77 2021/22 2020/21 2019/20 We measure employee engagement through our employee engagement survey (EES) called Grid:voice. Our engagement score was 81%. The result also includes WPD colleagues. Workforce diversity (%) – ethnicity We measure the percentage of ethnic minorities in our workforce. We aim to develop and operate a business that has an inclusive and diverse culture (see page 65 — 66). 20.2 19.5 18.8 2021/22 2020/21 2019/20 Our ethnic diversity data for 2021/22 does not include WPD colleagues. We are working to harmonise WPD’s ethnicity records for data collection, with those of the Group. We will look to include WPD data next year. Workforce diversity (%) – gender We measure the percentage of women in our workforce. We aim to develop and operate a business that has an inclusive and diverse culture (see page 65 — 66). 24.7 23.1 24.7 2021/22 2020/21 2019/20 Our gender diversity data for 2021/22 has been updated to include WPD colleagues, following the acquisition of WPD. 27 S trateg ic R ep o rt National Grid plc Annual Report and Accounts 2021/22 08_OurStrategy_Innovation_KPI_p20_27_v112.indd 27 27/05/2022 16:44

When the conflict began, we immediately established a crisis assessment team, of multi-disciplined leaders, to oversee and coordinate our response. We evaluated the immediate threat, analysed the risk profile across time horizons including scenario planning, and completed a strategic impact assessment. Although the immediate impact to National Grid was minimal, we increased our focus on risks and strengthened controls associated with cyber and physical security, security of energy supply, political and societal expectations, our supply chains, and sanction compliance. We supported the UK government with advice on stabilising energy markets, reducing UK (and EU) dependence on Russian energy and developing the British Energy Security Strategy. We made charity donations and provided electrical equipment to support the Ukrainian people (including 500 diesel generator units). The war, heightened energy bills, and changes to UK and EU energy policy have increased uncertainty across the energy sector. We are continually evaluating how we manage our risks, deliver for our customers, and fulfil our role as The Energy Transition Company. Ukraine-Russia 28 National Grid plc Annual Report and Accounts 2021/22 The Board is committed to protecting and enhancing our reputation and assets, while safeguarding the interests of our shareholders. Managing our risks National Grid is exposed to a variety of uncertainties that could have a material adverse effect on the Group’s financial condition, our operational results, our reputation, and the value of our shares. The Board oversees the Company’s risk management and internal control systems; it sets and monitors the amount of risk the Company is prepared to seek or accept in pursuing our strategic objectives – our risk appetite. The Board assesses the Company’s Group Principal Risks (GPRs) and monitors the risk management process through risk review and challenge sessions twice a year. Risk management process Risk strategy, policy and processes are set at Group level with the business responsible for implementation. Our Enterprise Risk Management (ERM) process provides a framework to identify, assess, prioritise, manage, monitor and report risks. It supports achieving our vision, strategy and business model as described on pages 4 – 7. This year we established a new risk governance structure with the creation of the Group Executive Ethics, Risk and Compliance Committee (Group ERC), along with equivalent committees in the business units, providing enhanced oversight and governance of risk top-down and bottom- up across the Group. Our corporate risk profile contains the GPRs that the Board considers to be the main uncertainties currently facing the Group as we endeavour to achieve our strategic objectives. These top risks are agreed through discussions on the Group’s risk profile with the Group ERC, Audit & Risk Committee and the Board. The risks are reported and debated with the Group ERC every two months, and with the Board at least every six months. Internal control and risk management Top-down, bottom-up assessment Risk management activities take place at all levels of our organisation. Through a ‘top-down, bottom-up’ approach, all business areas identify the main risks to our business model and our business objectives. For each risk the effectiveness of our internal controls is assessed when calculating the financial, operational and reputational impacts, and how likely the risk is to materialise. Where current risk levels are outside of agreed target scores and our risk appetite, the business area identifies and takes actions to close the gap. Cascade and escalation mechanisms are in place throughout the organisation as appropriate for risk appetite, risks, controls and action plans. Business First Line The business units and functions that are responsible for taking, owning and managing risks. The First Line works closely with the Second Line to agree policies and risk limits that align with risk appetite. Business Assurance Second Line The risk oversight teams provide independent oversight of risks, and establish policies and limits for the First Line. The assurance teams monitor risks and controls in support of the business. Assurance provides advice, but also effective challenge to the First Line. Governance (Board and Audit & Risk Committee) Establishes the strategy, operating model and risk framework. Evaluates reports. Internal Audit Third Line The Internal Audit function provides independent assurance over risks and controls. The Third Line function communicates directly with the Board and senior management regarding the effectiveness of risk and controls management. M aturity 09b_Internal_control_and_risk_management_p28_32_v53.indd 28 27/05/2022 16:45

Emerging risks 29 S trateg ic R ep o rt National Grid plc Annual Report and Accounts 2021/22 Changes during the year The Company’s risk profile has been developed drawing upon the most significant risks across our business profiles. Eight GPRs are now carried at Group ERC and Board level as detailed below. We reviewed all GPRs at least twice during the year, including an assessment of the key controls, the key risk indicators (KRIs), risk scores, alignment to risk appetite, and future mitigation actions. Through these reviews, our data management and disruptive forces risks were identified for de-escalation or retirement. There are no significant flags or hot spots that indicate a shift in risk exposure. This year we split our principal climate change risk to establish a discrete transition climate change risk and incorporated the physical impacts from climate change on our assets (adaptation) into our significant disruption of energy risk, to ensure a clear focus on the actions needed to mitigate these different risks. The significant disruption of energy risk focuses on network reliability and resilience. Emerging risks (ERs) are less defined than GPRs and typically do not pose an immediate threat. They are future focused, with greater uncertainty and are more difficult to quantify; however, they could threaten the future achievement of our strategy. Utilising future scenarios, horizon scanning and emerging risk assessments, we identify ERs that could potentially threaten the achievement of our strategic objectives in the future. Our ongoing ER process includes the identification, assessment, response, and reporting of ERs. Assessment includes the potential impact and velocity (time to impact) and our response is to then either watch, monitor or manage the risks that are reported to the Board and Group ERC using our emerging risk radar. Following our agreement to sell a 60% stake in the UK GT business and completion of our preliminary integration activities associated with the acquisition of WPD, we retired our ‘transaction-related’ GPR. Continued economic and political turmoil is significant, with years of global energy policy and strategy increasingly being affected. For National Grid, while our current risk levels are predominantly unchanged, the rapidly evolving situation and uncertainty require very careful monitoring and assessment of our GPRs and ERs. They have created an increase in the underlying (inherent) threat across our cyber, disruption of energy, political and societal expectations, and satisfactory regulatory risks, which we are continuously monitoring. Our principal risks and uncertainties Accepting that it is not possible to identify, anticipate or eliminate every risk that may arise, and that risk is an inherent part of doing business, our risk management process aims to provide reasonable assurance that we understand, monitor and manage the main uncertainties we face in achieving our objectives. This aim includes considering inherent risks, which in turn exist because of the nature of day-to-day operations in our industry, including financial risks, which exist because of our financing activities. Our GPRs, and a summary of actions taken by management, are provided on pages 30 – 32. We have provided an overview of the key inherent risks we face on pages 253 − 256, and specifically our key financial risks, which are incorporated within note 32 to the consolidated financial statements on pages 211 − 223. Risk trends reported on the pages that follow take into account controls and any additional mitigation actions, and may be influenced by internal or external developments. • Emerging risk assessments • Assessment outcomes determine how we will manage the emerging risk (watch, monitor, manage) • Future scenarios (strategy) • Horizon scanning • Emerging risks • Reporting of emerging risk watchlists, radar and risk management 1. Identify 3. Response 4. Report 2. Assess 09b_Internal_control_and_risk_management_p28_32_v53.indd 29 27/05/2022 16:45

30 National Grid plc Annual Report and Accounts 2021/22 People risks It is through the high-quality work of our employees that we will achieve our vision, respond to the changing needs of our stakeholders and create a competitive advantage. Building and fostering an engaged and talented team that has the knowledge, training, skills and experience to achieve our strategic objectives is vital to our success. We must attract, integrate and retain the talent we need at all levels of the business. These risks link to our strategic priority to ‘empower colleagues for great performance’. Risk Actions taken by management Capability and leadership There is a risk that we do not have sufficient capability and leadership capacity. *Risk trend: Neutral (2020/21: Neutral) Strategic priority link * Risk trends are assessed to include any external factors outside our control as well as the strength and effectiveness of our controls and additional mitigations as reviewed by management up to 31 March 2022. We are involved in a number of initiatives to help secure the future engineering talent we require, including industrial placements and internships in the UK and US, advanced and higher apprenticeships in the UK and a graduate development programme across both the US and UK. We are focused on ensuring we have high levels of diversity in these future talent pools. Our entry-level talent development schemes (graduate training and apprenticeships) are a potential source of competitive advantage in the marketplace. We also continue to develop the rigour of our succession planning and development planning process, particularly at senior levels. We are now applying it deeper into the organisation as well as giving continued attention to the ethnic diversity of both our management and field force. There are multiple activities underway to support this agenda, including ‘neutral’ talent and selection processes, development interventions and a global launch of our diversity, equality and inclusion (DEI) strategy and resources. Financial risks While all risks have a direct or indirect financial impact, financial risks are those which relate to financial objectives and performance. Financial risk management is a critical process used to make investment decisions and aims to maximise investment returns and earnings for a given level of risk. None of our financial risks are currently classified as GPR. Our key financial risks are described in note 32 to the financial statements on pages 211 – 223. Strategic risks Strategic risk is the risk of failing to achieve our overall strategic business plans and objectives, as well as failing to have the ‘right’ strategic plan. We intentionally accept some risk so we can generate the desired returns from our strategy. Management of strategic risks focuses on reducing the probability that the inherent risk would materialise, while improving our ability to respond to the risk effectively should it occur. The risk owners, executive leaders and their teams develop and monitor ways to control the risks. These risks link to our strategic priorities of ‘enable the energy transition for all’ and ‘deliver for customers efficiently’. The political climate and policy decisions of our regulators were key considerations in assessing our risks. Risk Actions taken by management Climate change There is a risk that we fail to identify and/or deliver upon actions necessary to address the transitional impacts (from a changing energy system) of climate change on our business and demonstrate our leadership of climate change in the energy sector. Risk trend: Neutral (2020/21: Neutral) Strategic priority link Putting in place measures to: • evolve our environmental sustainability metrics to better reflect our strategy, measure our impact and track our progress; • address our GHG emissions and meet our sustainability commitments, including net zero by 2050, hosting our first environmental, social and governance (ESG) investor seminar, including the publication of our Responsible Business Charter setting out what responsibility means for us and our commitments and ambitions over the coming years − progress is reported in our annual Responsible Business Report; • advocate for legislative and policy changes that advance decarbonisation, while proposing and delivering actions in the regions we operate to accelerate decarbonisation for the public and our customers. This work is wide-ranging from system improvements to supporting renewable generation connections, EV proposals, oil to gas/electricity heat conversions, energy efficiency, interconnectors, thought leadership and investment in new and emerging areas. Note that a number of the above measures also address the physical impacts of climate change on our operations; • regularly assess the potential range of net zero pathways and future impact on our gas assets, including evaluation of new and evolving technologies and alternative fuel sources (e.g. hydrogen); • work to include renewable gases in our US gas distribution networks; • commit to making disclosures which are aligned with the Task Force on Climate- related Financial Disclosures (TCFD), including physical and transitional scenario analysis (see pages 70 − 83); • support the charging infrastructure required for increased use of EVs; • promote energy-efficiency programmes for customers in the US; • facilitate decarbonisation in the US and UK, including zero-carbon operation of the GB electricity system through ESO in the UK; and • continue work on programmes to develop skills in our current and future workforce. Internal control and risk management continued 09b_Internal_control_and_risk_management_p28_32_v53.indd 30 27/05/2022 16:45

31 S trateg ic R ep o rt National Grid plc Annual Report and Accounts 2021/22 Risk Actions taken by management Satisfactory regulatory outcomes There is a risk that we fail to influence future energy policies and secure satisfactory regulatory agreements. Risk trend: Neutral (2020/21: Neutral) Strategic priority link In both the UK and the US, we strive to maintain a good understanding of the regulatory agenda and emerging issues, so that we can select and develop robust, public interest aligned responses in good time. Our reputation as a competent operator of important national infrastructure is critical to our ability to do this. We have plans and governance structures in place to address key regulatory proceedings such as UK price controls and US rate case filings. Ongoing work to support our regulatory relationships includes: • in the UK, influencing policy through a range of avenues, including inputting and responding to government consultations and other outputs, direct engagement with government departments and engagement with wider stakeholders such as parliamentarians, trade associations and third parties; • in the US, influencing policy through a range of avenues, including inputting and responding to legislative proposals, regulatory rulemakings and requests for information and other outputs; advocating with Congress and the Administration; and engagement with wider stakeholders such as trade associations, think tanks and other non-government organisations; • establishing a regulatory strategy focusing on a transition to performance-based regulation; • establishing US and UK regulatory steering committees; and • increased focus on understanding the needs and expectations of all our stakeholders through regulatory relationship surveys, investor surveys and review of media sentiment. Political and societal expectations and perceptions There is a risk that we do not position ourselves appropriately to political and societal expectations. Risk trend: Neutral (2020/21: Increasing) Strategic priority link Processes and resources are in place to review, monitor and influence perceptions of our business and our reputation by: • enhancing and consolidating our digital roadmap and social channels; • developing an internal forum to increase management of stakeholder and media reputational issues; • meeting our commitment to be a responsible business (see pages 60 − 69); and • promoting partnerships and proactive policy-change discussions across the jurisdictions where we operate. Considerations on emerging risks and horizon-scanning activities have also been addressed as part of financial and reputational impact assessments. These processes, along with twice-yearly Board strategy discussions, are reviewed regularly to ensure they continue to support our short- and long-term strategy. We regularly monitor and analyse market conditions, competitors and their potential. Operational risks Operational risks relate to the losses resulting from inadequate or failed internal processes, people and systems, or due to external events. These risks normally fall within our low-risk appetite level as there is no strategic benefit from accepting the risk, as it will not be in line with our vision and values. Our operational principal risks have a low inherent likelihood of occurring. However, should an event occur, without effective prevention or mitigation controls, it would be likely to have a high level of impact. The risk owners, executive leaders and their teams develop and monitor actions to control the risks. Operational risks are managed through policy, standards, procedure-based controls, active prevention and monitoring. The operational risks link to our strategic priority to ‘deliver for customers efficiently’. Principal risk assessment includes reasonable worst-case scenario testing, e.g. gas transmission pipeline failure, loss of licence to operate, cyber security attack, and the financial and reputational impact should a single risk or multiple risks materialise. Risk Actions taken by management COVID-19 There is a risk that we fail to respond to significant disruptive factors caused by the COVID-19 pandemic. Risk trend: Decreasing: driven by the move to ‘living with COVID-19’ policies in the UK and US (2020/21: Decreasing) Strategic priority link The COVID-19 pandemic affected several areas of our business, and we responded with a comprehensive plan, supporting the safety of our workforce and customers. • Mitigating procedures are now part of business as usual, with further improvements to the Crisis Management Framework (CMF) planned. • As COVID-19 rates reduce and the UK and US begin to move to an endemic status, we expect the risk will be retired as a GPR in 2022/23. Throughout 2021/22 we have monitored effects on our people, operations, strategic objectives, regulatory and political engagement, and financial implications. Our approach has been proactive to ensure our business can continue to serve its customers appropriately. 09b_Internal_control_and_risk_management_p28_32_v53.indd 31 27/05/2022 16:45

32 National Grid plc Annual Report and Accounts 2021/22 Risk Actions taken by management Cyber security There is a risk that we are unable to adequately anticipate and manage disruptive forces on our systems because of a cyber-attack, or poor recovery of critical systems or malicious external or internal parties. Risk trend: Increasing: driven by increased threat from global geopolitical tensions (2020/21: Decreasing) Strategic priority link We are committed to providing secure and resilient services and continue to commit significant resources and financial investment to maintaining the security of our systems and our data. Our approach is holistic and includes: • close partnerships with UK and US government agencies, including the Department for Business, Energy and Industrial Strategy (BEIS), the Centre for Protection of National Infrastructure (CPNI), the Department of Energy and Climate Change and the Department of Homeland Security, to understand risks and collaborate on risk management activities; • utilising good practice frameworks including the National Institute of Standards and Technology Cybersecurity Framework to ensure we can identify, protect, detect, respond and recover from cyber security threats (i.e. implementation of control frameworks across our security programmes in IT, operational technologies and Critical National Infrastructure (CNI); and • a strong focus on compliance with our regulatory obligations including the European Union Directive on Security of Network and Information Systems Regulation (the ‘NIS Directive’) and US North American Electric Reliability Corporation Critical Infrastructure Protection. Asset failure There is a risk of a catastrophic asset failure leading to a significant safety or environmental event. Risk trend: Neutral (2020/21: Neutral) Strategic priority link We continue to focus on risk mitigation actions designed to reduce the risk and help meet our business objectives, including the following: Ongoing preventative measures: • inspection and maintenance programmes including defect management; • UK and US winter-preparedness plans; • US storm-hardening programme; and • outage planning. Event response: • emergency response plans; • incident-management system; • disaster recovery; and • business continuity management. Embedded Group-wide process safety management system: • to make sure a rigorous and consistent framework of risk management exists across our high-hazard asset portfolio, with safety-critical assets clearly identified on the asset register. Implemented asset management and data management standards, including: • supporting guidelines to provide clarity on what is expected; and • a strong focus on what we need in place to keep us safe, secure and legally compliant. Established capability frameworks to make sure our workforce has the appropriate skills and expertise to meet the performance requirements in these standards. Significant disruption of energy There is a risk that we fail to predict and respond to a significant disruption of energy supply. Risk trend: Neutral (2020/21: Increasing) Strategic priority link We continue to apply a holistic approach to managing this risk through preventative mitigating actions to maintain network reliability, and timely and effective response plans. Key management actions include the following: Ongoing preventative measures: • inspection and maintenance programmes including defect management; • flood contingency plans for substations; • System Operator supply and demand forecasting; • UK and US winter-preparedness plans; • US gas-mains replacement programmes; • US storm-hardening programme; • outage planning; and • diversity of suppliers in our US gas procurement. Event response: • emergency response plans; • incident-management system; • disaster recovery; and • business continuity management. We have also reviewed market resource adequacy and balancing (where applicable). The short-term controls and investments needed for a resilient network are in place, but further work remains to be done to build our climate adaptation forecasting and control framework for the next decade. Internal control and risk management continued 09b_Internal_control_and_risk_management_p28_32_v53.indd 32 27/05/2022 16:45

33 S trateg ic R ep o rt National Grid plc Annual Report and Accounts 2021/22 The Board’s consideration of the longer-term viability of the Company is an extension of our business planning process. The process includes financial forecasting, a strict risk management assessment and regular budget reviews and scenario planning incorporating industry trends, considering any emerging issues and economic conditions. Our business strategy aims to enhance our long-term prospects by making sure our operations and finances are sustainable. Using our established top-down, bottom-up risk- management process, we monitor and challenge the GPRs facing the Company as described on pages 28 − 32. Over the year, the Board has considered the preventative and mitigating controls and risk management actions in place for the GPRs and discussed the potential financial and reputational impact of the GPRs on our ability to achieve the Company’s business plan. The assessment of the potential impact of our GPRs on the longer-term viability of the Company tests the significant solvency and liquidity risks involved in achieving our business objectives and priorities. Although it has considered adopting varying time periods, the Board believes five years is the most appropriate timeframe over which we should assess the long-term viability of the Company. Our GPRs are subject to annual stress testing to assess whether we have a reasonable expectation that the Company will be able to continue in operation and meet its liabilities as they fall due (our continued viability). Viability is assessed considering the following criteria: Reasonable worst- case scenario (RWCS) A theoretical generic representation of a challenging yet plausible manifestation of a risk. The RWCS is considered worst-case once the high-impact, low-likelihood manifestations of a risk have been discounted. Five-year horizon A five-year assessment period represents a reasonable time horizon that coincides with our more detailed annual business plan models that reflect the UK price control periods. It is a period over which we can foresee and quantify reasonably accurately the potential impact of future risk events. Cliff-edge risks Cliff-edge risks are threats that would occur beyond the assessment period, have a reasonably certain impact and are sufficiently large to threaten our viability. We consult the business to look for significant and potential cliff-edge risks beyond the five-year period. If any such risks are identified, then an assessment period beyond five years is considered. Financial and reputational risk capacity We primarily assess our viability from the RWCS in two ways: financial risk capacity and reputational risk capacity. Business plan stress testing We assess the financial impact and financial risk capacity of our risk testing using the latest business plan. Individual risk testing For each principal risk we assess the potential financial and reputational impact. Risk cluster testing We also test for risk clusters. This is the impact of more than one of the principal risks materialising during the assessment period, or where the materialisation of one risk could exacerbate another. Mitigation actions Where a risk scenario would potentially exceed our financial risk capacity, we consider reasonable management mitigation. We considered each GPR for inclusion within the testing and, where appropriate, identified and assessed a RWCS for impacts on operations or financial performance over the five-year assessment time period as detailed below: Operational impacts Scenario 1 A significant cyber-attack. Scenario 2 Significant supply disruption event occurring in the US during peak season. Scenario 3 A significant process safety gas pipeline failure in NY. Performance impacts Scenario 4 Poor outcome of future US rate case filings, and low performance under RIIO-T2 and RIIO-ED2. Scenario 5 A breach of compliance rules for onshore competition in electricity transmission by ET. NY legislation and political relationships leading to loss of NY licences. Scenario 6 Inability to recover NY/NE COVID-19-related bad debts through future regulatory agreements. Scenario 7 Not meeting our net zero targets. In addition to testing individual GPRs, we also considered the impact of a cluster of the GPRs materialising over the assessment period. By assessing the interconnectivities of our GPRs we have selected the risk cluster RWCS that poses the most significant threat to our viability. Our cluster RWCS is a catastrophic cyber-attack, contributing to a catastrophic asset failure and a significant safety event, causing a significant disruption of energy, and ultimately to a loss of our regulatory licences. The scenario is assumed to occur in our US NY gas businesses. Viability statement We considered the reputational and financial impacts for each scenario. The GPR relating to leadership capacity was not tested, as the Board did not feel this would threaten the viability of the Company within the five-year assessment period. The Board assessed our reputational and financial headroom and reviewed GPR testing results using that headroom. The testing of risk clusters also included an assessment of the impact upon the business plan. No GPR or cluster was found to have an impact on the viability of the Company over the five- year assessment period. Preventative and mitigating controls in place to minimise the likelihood of occurrence and/or financial and reputational impact are contained within our assurance system. In assessing the impact of the GPRs on the Company, the Board has considered the fact that we operate in stable markets and the robust financial position of the Group, including the ability to sell assets, raise capital and suspend or reduce the payment of dividends. Each Director was satisfied that they had sufficient information to judge the viability of the Company. Based on the assessment described above and on pages 28 − 32 the Directors have a reasonable expectation that the Company will be able to continue operating and meet its liabilities over the period to May 2027. 10_Viability_statement_p33_35_v40.indd 33 27/05/2022 16:48

34 National Grid plc Annual Report and Accounts 2021/22 Viability statement continued Principal risk Viability scenario Matters considered and overseen by the Board Cyber security: there is a risk that we are unable to adequately anticipate and manage disruptive forces on our systems because of a cyber-attack, poor recovery of critical systems or malicious external or internal parties. Scenario 1 – A significant cyber-attack. Included in the risk cluster testing. £1.5 billion total cost impact. The Board reviewed and discussed cyber security reports: • as part of digital immersion sessions in September 2021 and March 2022, which included the conflict in Ukraine and risk associated with cyber security posed by Russia. The Audit & Risk Committee reviewed and discussed cyber security reports: • as part of a cyber risk deep dive at the Audit & Risk Committee in September 2021 and March 2022, including IAM updates. Significant disruption of energy: there is a risk that we fail to predict and respond to a significant disruption of energy supply. Scenario 2 – Significant supply disruption event occurring in the US during peak season. Included in the cluster testing. £50 million total cost impact. Two Board strategy sessions were held during the year covering: • energy transition in June 2021; • the CEO’s update on UK and US gas markets, amidst rising prices in October 2021; and • a UK businesses overview in November 2021. In addition, the following occurred: • The Finance Committee conducted a review of the black-swan event (Texas). • The Audit & Risk Committee conducted a Risk Deep Dive in March 2022. Asset failure: there is a risk of a catastrophic asset failure leading to a significant safety or environmental event. Scenario 3 – A significant process safety gas pipeline failure in the US. Included in the cluster testing. £3.14 billion total cost impact. The Board reviewed and evaluated the current safety performance of the Company at each meeting during the year. In addition, there was: • an ET performance update in July 2021; • a US Business overview evaluation in September 2021; • a UK Businesses overview in November 2021, including WPD; and • a leading indicators deep dive in May 2022. Furthermore: • the Safety & Sustainability Committee conducted an Annual Safety Review in July 2021; and • the IFA fire investigation was reviewed and discussed at the Safety & Sustainability Committee; with the insurance items discussed at the Finance Committee. COVID-19: there is a risk that we fail to respond to significant disruptive factors caused by the COVID-19 pandemic. Scenario 6 – Inability to recover US COVID-19- related bad debts through future regulatory agreements. $369 million net COVID-19 bad debt impact as at 31 March 2022. • Board briefings including weekly update from the Chief Executive (CEO) and Chief Financial Officer (CFO) on our COVID-19 impacts and response. • COVID-19 updates on operational issues, people absences and wellbeing to the Board; and Finance Committee consideration of liquidity. • Review of our business continuity planning response and effectiveness of the crisis-management controls through a management exercise. 10_Viability_statement_p33_35_v40.indd 34 27/05/2022 16:48

35 S trateg ic R ep o rt National Grid plc Annual Report and Accounts 2021/22 Principal risk Viability scenario Matters considered and overseen by the Board Satisfactory regulatory outcomes: there is a risk that we fail to influence future energy policies and secure satisfactory regulatory agreements. Scenario 4 – Poor outcome of future US rate case filings, and low performance under RIIO-T2 and RIIO-ED2. £500 million cost impact from lower average allowed RoE in US rate cases. £780 million cost impact from nil outperformance under RIIO-T2 and RIIO-ED2. The Board received updates and performed reviews in relation to: • the CMA appeal; • WPD Regulatory strategy; • NY Monitor; • RIIO-T2 overview; • US business overview evaluation; • UK and US gas market amidst rising prices; • the UK regulatory landscape and regulatory framework; and • ESO future outlook. Climate change: there is a risk that we fail to identify and/or deliver upon actions necessary to address the transitional impacts (from a changing energy system) of climate change on our business and demonstrate our leadership of climate change in the energy sector. Scenario 7 – Not meeting our net zero targets. No immediate financial impacts; various reputational impacts were considered. The Board and its Committees discussed sustainability metrics and strategy to reflect and track our impact and progress, including: • a bi-annual review of GPR climate change and climate risk, plus the energy policy environment in the UK; • ESG discussions around energy transition and climate change, including investor expectations; • a discussion on the climate resolution at the 2021 AGM; • disclosures in line with the TCFD recommendations; • the review and approval of the publication of the Responsible Business Charter; • a review of GHG emissions performance by the Safety & Sustainability Committee; and • active participation as a Principal Partner in COP26. Political and societal expectations and perceptions: there is a risk that we do not position ourselves appropriately to political and societal expectations. Scenario 5 – A breach of compliance rules for onshore competition in electricity transmission by UK ET. NY legislation and political relationships leading to loss of NY licences. £400 million UK fines and penalties. Reasonable (rate base) consideration for US assets. The Board received updates and reviews in relation to: • Western Link outcomes; • the NY Monitor update and review meeting with NY Monitor; • the US business overview evaluation; • Audit & Risk Committee-led meetings which were specific to the Federal Investigation (Fraud and Bribery) during July to October 2021; • COP26, leading up to the event in Glasgow; • the Bid Defence Plan; • the UK political landscape; • UK and US gas markets amidst rising prices; • a deep dive on the energy policy environment in the UK; and • the short-, medium- and long-term impacts of the war in Ukraine. Capability and leadership: there is a risk that we do not have capability and leadership capacity. N/A Capability and leadership is an integral part of the Board’s vision and strategy. The Board’s approach included: • the approval of Board Committee changes which were made effective from 1 September 2021; • regular leadership updates throughout the year, including a deep dive on leadership in September 2021; • bi-annual updates on people matters; • the People & Governance (P&G) Committee’s consideration of the structure, size and composition of the Board and Committees (the P&G Committee also led on Board succession planning – identifying and proposing individuals to be Directors of the Company and establishing the criteria for new positions); and • a review of the Diversity Policy. 10_Viability_statement_p33_35_v40.indd 35 27/05/2022 16:48

Revenue and profits InvestmentCash flows 1 32 The vast majority of our revenues are set in accordance with our regulatory agreements (see pages 245 – 252), 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. 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. 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 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. Capital allocation Our capital allocation is determined by the need to make the investments and outputs required under our regulatory frameworks in the UK and US (which accounted for over 90% of our capital expenditure in 2021/22), balanced with the desire to invest in our other businesses, such as NGV and NGP, which may achieve higher growth. The investments we make seek a balance between growth through investments, such as the WPD acquisition, investments in our higher-growth NGV businesses and through NGP, and the continued growth of our steady cash flow core regulated operations, while ensuring we continue to deliver a consistent and reliable dividend to our shareholders. Revenue (%) 10.2% 17.3% 7.4% 6.9% 23.0% 28.1% 7.1% Statutory operating profit (%) 21.1% 0.1% 18.2% 12.7% 15.3% 21.9% 10.7% Capital investment (%) 17.1% 1.5% 12.8% 3.7% 22.3% 28.0% 14.5% Financial review UK Electricity Transmission UK Electricity System Operator UK Electricity Distribution UK Gas Transmission New England New York National Grid Ventures and Other activities 36 National Grid plc Annual Report and Accounts 2021/22 11_Financial_Review_p36_49_v33.indd 36 27/05/2022 16:49

Summary of Group financial performance Performance management framework In managing the business, we focus on various non-IFRS measures which provide meaningful comparisons of performance between years, monitor the strength of the Group’s balance sheet as well as profitability and reflect the Group’s regulatory economic arrangements. Such alternative and regulatory performance measures are supplementary to, and should not be regarded as a substitute for, IFRS measures, which we refer to as statutory results. We explain the basis of these measures and, where practicable, reconcile these to statutory results in ‘Other unaudited financial information’ on pages 268 – 279. Our regulatory performance measures have only been calculated for the total Group (or individual entities where relevant), as these are not based on IFRS measures. Specifically, we measure the financial performance of the Group from different perspectives: • Capital investment and asset growth: Currently we expect to invest c. £7 billion per year. • Accounting profit: In addition to statutory IFRS measures we distinguish between adjusted results, which exclude exceptional items and remeasurements, and underlying results, which further take account of: (i) volumetric and other revenue timing differences arising from our regulatory contracts; and (ii) major storm costs, which are recoverable in future periods, neither of which give rise to economic gains or losses. 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: Measures such as Return on Equity (RoE) and Value Added take account of the regulated value of our assets and of our regulatory economic arrangements to illustrate the returns generated on shareholder equity. • 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. This balanced range of measures of financial well-being informs our dividend policy, which from 2021/22 is to grow the dividend per share at least in line with rate of CPIH each year. Summary of Group financial performance for the year ended 31 March 2022 Financial summary for continuing operations Last year we announced that we would make a strategic pivot towards higher growth electricity. On 14 June 2021, we acquired Western Power Distribution plc (WPD) an electricity distribution business based in the South West of the UK. Our planned disposals of the Narragansett Electric Company (NECO) business in Rhode Island and UK Gas Transmission (and metering) are expected to complete during 2022/23. The combination of these transactions has resulted in a change to the Group’s structure and a new organisational structure has been implemented. As a result, the operating segments reported to our Board have changed from those reported in 2020/21. Our segmental reporting for continuing operations is aligned with our five regulated business units, along with National Grid Ventures (NGV) and Other non-regulated businesses. The UK Electricity System Operator is now separately reported from UK Electricity Transmission. The acquisition of WPD introduces a UK Electricity Distribution segment. Our US Regulated segment has been divided between the jurisdictions of New England and New York, to align more closely with our regulatory framework. Lastly, as part of the new organisational structure, our generation business on Long Island in New York is now reported as part of NGV. The expected disposal in the third quarter of 2022/23 of a majority stake in our UK Gas Transmission businesses (including metering, which was previously reported within NGV) means that this business is now classified as a discontinued operation. The expected disposal of NECO does not meet the definition of a discontinued operation under IFRS, so is reported within New England as part of continuing operations. Both UK Gas Transmission and NECO are classified as held for sale in the balance sheet as at 31 March 2022. NECO was also reported as held for sale in the comparative balance sheet at 31 March 2021. Unless otherwise stated, the following commentary and analyses are for the continuing operations of the Group (as defined by IFRS 5 ‘Non-current Assets Held for Sale and Discontinued Operations’). Within the Financial review, ‘Total Group’ refers to results and balances including discontinued or held for sale businesses (as defined by IFRS 5). Where applicable, comparative amounts have been restated accordingly. Financial summary for continuing operations £m  2021/22 2020/21 Change Statutory results:     Operating profit 4,371 2,401 82% Profit after tax 2,183 1,304 67% Earnings per share (pence) 60.6p 37.0p 64% Dividend per share (pence), including proposed final dividend 50.97p 49.16p 4% Capital expenditure 6,185 4,727 31% Alternative performance measures: Underlying operating profit 3,992 2,688 49% Underlying profit after tax 2,351 1,493 57% Adjusted earnings per share (pence) 61.4p 36.7p 67% Underlying earnings per share (pence) 65.3p 42.4p 54% Underlying dividend cover 1.3 0.9 49% Capital investment 6,739 4,843 39% Financial summary total – including discontinued operations £m  2021/22 2020/21 Change Statutory results: Operating profit 5,008 2,895 73% Profit after tax 2,354 1,641 43% Earnings per share (pence) 65.4p 46.6p 40% Capital expenditure 6,446 4,931 31% Alternative performance measures: Adjusted operating profit, pre timing and major storm costs1 4,726 3,283 44% Adjusted profit after tax, pre timing and major storm costs1 2,760 1,911 44% Adjusted earnings per share (pence) 71.0p 46.4p 53% Adjusted earnings per share, pre timing and major storm costs (pence) 76.7p 54.2p 42% Capital investment 7,000 5,047 39% Retained cash flow/adjusted net debt 8.9% 6.6% 230bps Regulatory performance measures: Asset growth 8.7% 5.6% 310bps Group Return on Equity2 11.4% 10.6% 80bps Value Added 3,833 1,808 112% Regulatory gearing 81% 65% 1600bps 1. Comparable to ‘underlying’ results, but including discontinued operations. 2. Group RoE methodology amended in 2021/22 to calculate accretion charge on inflation-linked debt at long-run inflation rates. This provides alignment to treatment of RAV indexation in the metric. Prior year comparatives have not been restated. Statutory results from continuing operations of £2,183 million were up £879 million from the prior year. Statutory EPS for continuing operations of 60.6p was 23.6p higher than the prior year. The Group’s statutory results for the year were impacted by net exceptional charges of £320 million (2021: £52 million net charge) and remeasurement gains of £292 million (2021: £62 million gains). Our ‘adjusted’ results exclude exceptional items, but are impacted by revenue timing and major (deferrable) storm costs, as explained on page 39. Our ‘underlying’ results are presented excluding the total impact of exceptional items, remeasurements, timing and major storm costs. A reconciliation between these alternative performance measures and our statutory performance is detailed on page 38 and in the section ‘Other unaudited financial information’ on pages 268 – 279. National Grid plc Annual Report and Accounts 2021/22 37

Underlying operating profit for continuing operations was up 49%, driven by the acquisition of WPD, improved performance in NGV, NG Partners and UK Electricity Transmission, along with higher property sales, no depreciation on NECO in New England (held for sale treatment) and a lower adverse impact from COVID-19 compared with 2020/21. Our joint ventures and associates contribution increased (mainly UK interconnector revenues). These factors were partly offset by higher net financing costs from both inflation on RPI-linked debt and interest on a higher level of borrowings related to the acquisition of WPD. Other interest was favourable year-on-year. The tax charge was higher driven by increased taxable profits and additional deferred tax charges in the UK and the US. Underlying profit after tax increased by 57% and resulted in a 54% increase in underlying EPS to 65.3p. Profit after tax for discontinued operations of £171 million was down £166 million compared with the prior year principally due to exceptional charges related to deferred tax from the change in the UK corporation tax rate, higher interest costs driven by inflation, partly offset by cessation of depreciation following held for sale treatment and higher revenues under RIIO-2. Capital investment of £7.0 billion (including discontinued operations of £0.3 billion) along with RAV indexation helped increase our asset growth to 8.7%. We delivered Value Added (our measure of economic profit) of £3.8 billion (including UK Gas Transmission) in 2021/22, significantly higher than in 2020/21 mainly as a result of higher RAV indexation. Group RoE of 11.4% was up from 10.6% for 2020/21. RCF/net debt at 8.9% was higher than 6.6% in 2020/21. The recommended full-year dividend per share of 50.97p is in line with the new policy announced in March 2021 of increasing in line with UK CPIH inflation and is covered 1.3 times by underlying EPS. Profitability and earnings The table below reconciles our statutory profit measures for continuing operations, at actual exchange rates, to adjusted and underlying versions. Reconciliation of profit and earnings from continuing operations Operating profit  Profit after tax  Earnings per share  £m  2021/22 2020/21 Change 2021/22 2020/21 Change 2021/22 2020/21 Change Statutory results 4,371 2,401 82% 2,183 1,304 67% 60.6p 37.0p 64% Exceptional items (166) 60 320 52 8.9p 1.5p Remeasurements (392) (34) (292) (62) (8.1) p (1.8p) Adjusted results 3,813 2,427 57% 2,211 1,294 71% 61.4p 36.7p 67% Timing 16 111 19 88 0.5p 2.5p Major storm costs 163 150 121 111 3.4p 3.2p Underlying results 3,992 2,688 49% 2,351 1,493 57% 65.3p 42.4p 54% Reconciliation of profit and earnings from discontinued operations Statutory operating profit for discontinued operations of £637 million (2021: £494 million) includes £17 million of exceptional items (2021: £5 million) and timing under-recovery of £80 million (2021: £96 million). Depreciation of the assets in UK Gas Transmission was ceased following reclassification to held for sale (in accordance with IFRS 5) on 1 September 2021. Tax on exceptional items for discontinued operations comprises a £1 million credit in respect of other exceptional items (2021: £nil) and a deferred tax exceptional charge related to the change in the UK corporation tax rate of £145 million (2021: £nil). In our adjusted results for discontinued operations, tax on timing was £15 million (2021: £18 million). Statutory earnings per share from discontinued operations was 4.8p (2021: 9.6p) and underlying earnings per share from discontinued operations was 11.4p (2021: 11.8p). Exceptional income/(expense) from continuing operations Impact on operating profit Impact on profit after tax Impact on EPS £m  2021/22 2020/21 2021/22 2020/21 2021/22 2020/21 Environmental insurance recovery and change in environmental provisions 38 14 28 11 0.8p 0.3p Transaction and separation costs (223) (24) (204) (24) (5.7) p (0.7) p New operating model implementation costs (66) (50) (52) (39) (1.4p) (1.1) p Net gain on disposal of St William joint venture and release of deferred income 417 — 366 — 10.1p —p Deferred tax arising on the change in UK corporation tax rate — — (458) — (12.7p) —p Total 166 (60) (320) (52) (8.9) p (1.5) p This year we have classified the following items as exceptional: • Environmental insurance recovery: a £38 million gain related to an insurance receivable for site remediation costs related to our US Superfund sites environmental provision, recorded as exceptional in line with the treatment of the related costs; • Transaction and separation costs: £223 million of transaction costs associated with the acquisition of Western Power Distribution (WPD), the sale of NECO and the sale of UK Gas Transmission (2021: £24 million); • New operating model implementation costs and efficiency programme: £66 million of costs in relation to the design and implementation of our new operating model that is designed to transform our operating framework (2021: £50 million); • Gain on disposal of St William property joint venture and release of deferred income: £228 million gain on the divestment of a 50% interest in an equity investment in March 2022 along with release of £189 million of deferred income arising on historical sales made to that joint venture; and • Change in UK corporation tax rate: a £458 million deferred tax charge for the increase in UK corporation tax rate from 19% to 25% which takes effect from 1 April 2023. In the prior year we also classified as exceptional the £14 million credit for partial release of US environmental provisions previously treated as exceptional. We also exclude certain unrealised gains and losses on mark-to-market financial instruments from adjusted profit; see notes 5 and 6 to the financial statements for further information. Net remeasurement gains of £392 million on commodity contract derivatives (i.e. ‘mark-to-market’ movements on derivatives used to hedge the cost of buying wholesale gas and electricity on behalf of our US customers) occured during the year, in addition to net remeasurement gains of £59 million on financing-related instruments (used to hedge interest and currency risk on net borrowings); along with a further £56 million of remeasurement losses related to our share of post-tax results of joint ventures. The expected future exceptional costs related to the new operating model and cost efficiency programme are expected to be in the region of £100 million. Financial review continued 38 National Grid plc Annual Report and Accounts 2021/22

Exceptional items for discontinued operations Discontinued operations includes an exceptional item of £17 million (2021: £5 million) related to cost efficiency programme and separation costs ahead of the sale of the UK Gas Transmission and Metering business. Timing over/(under)-recoveries In calculating underlying profit, we exclude regulatory revenue timing over- and under-recoveries and major storm costs (as defined below). Under the Group’s regulatory frameworks, most of the revenues we are allowed to collect each year are governed by regulatory price controls in the UK and rate plans in the US. If more than this allowed level of revenue is collected, an adjustment will be made to future prices to reflect this over-recovery; likewise, if less than this level of revenue is collected, an adjustment will be made to future prices in respect of the under-recovery. We also collect revenues from customers and pass these on to third parties (e.g. NYSERDA). These variances between allowed and collected revenues and timing of revenue collections for pass-through costs give rise to over- and under-recoveries. The following table summarises management’s estimates of such amounts for the two years ended 31 March 2022 for continuing and discontinued operations. All amounts are shown on a pre-tax basis and, where appropriate, opening balances are restated for exchange adjustments and to correspond with subsequent regulatory filings and calculations. All amounts are translated at the current year average exchange rate of $1.35:£1. £m 2021/22 2020/211 Balance at start of year (restated) 43 259 In-year (under)/over-recovery – continuing operations (16) (111) In-year (under)/over-recovery – discontinued operations (80) (96) Balance at end of year (53) 52 1. March 2021 balances restated for segmental changes and to correspond with 2020/21 regulatory filings and calculations. In 2021/22, we experienced timing under-recoveries of £85 million in UK Electricity Transmission, over-recoveries of £22 million in UK Electricity Distribution, under-recoveries of £47 million in UK Electricity System Operator, under-recoveries of £32 million in New England and over- recoveries of £126 million in New York. In calculating the post-tax effect of these timing recoveries, we impute a tax rate, based on the regional marginal tax rates, consistent with the relative mix of UK and US balances. Major storm costs We also take account of the impact of major storm costs in the US where the aggregate amount is sufficiently material in any given year. Such costs (net of certain deductibles and allowances) are recoverable under our rate plans but are expensed as incurred under IFRS. Accordingly, where the net total incurred cost exceeds $100 million in any given year, we exclude the net costs from underlying earnings. In 2021/22, we incurred deferrable storm costs, which are eligible for future recovery of $220 million (2021: $201 million). Segmental operating profit The tables below set out operating profit on adjusted and underlying bases. Adjusted operating profit £m  2021/22 2020/21 Change UK Electricity Transmission 1,067 1,094 (2) % UK Electricity Distribution 909 — n/a UK Electricity System Operator 7 (60) (112) % New England 743 611 22% New York 780 665 17% NGV and Other activities 307 117 162% Continuing operations 3,813 2,427 57% Discontinued 654 499 31% Total 4,467 2,926 53% Underlying operating profit £m  2021/22 2020/21 Change UK Electricity Transmission 1,152 1,052 10% UK Electricity Distribution 887 — n/a UK Electricity System Operator 54 70 (23) % New England 886 727 22% New York 706 722 (2) % NGV and Other activities 307 117 162% Continuing operations 3,992 2,688 49% Statutory operating profit increased in the year, primarily as a result of the 9.5 months’ contribution from WPD, the exceptional gain on disposal of our St William joint venture, higher UK Electricity Transmission revenues, increased interconnector revenues and fair value gains in NG Partners, no depreciation of our Rhode Island business and a lower adverse impact from COVID-19 compared with 2020/21. These benefits were partly offset by higher exceptional charges than in 2020/21 along with adverse year-on- year movements on timing recoveries. The reasons for the movements in underlying operating profit are described in the segmental commentaries below. Unless otherwise stated, the discussion of performance in the remainder of this Financial review focuses on underlying results. UK Electricity Transmission £m  2021/22 2020/21 Change Revenue 2,035 1,974 3% Operating costs (980) (894) 10% Statutory operating profit 1,055 1,080 (2) % Exceptional items 12 14 (14) % Adjusted operating profit 1,067 1,094 (2) % Timing 85 (42) (302) % Underlying operating profit 1,152 1,052 10% Analysed as follows: Net revenue 1,883 1,823 3% Regulated controllable costs (227) (192) 18% Post-retirement benefits (26) (32) (19) % Other operating costs (55) (44) 25% Depreciation and amortisation (508) (461) 10% Adjusted operating profit 1,067 1,094 (2) % Timing 85 (42) (302) % Underlying operating profit 1,152 1,052 10% UK Electricity Transmission statutory operating profit was £25 million lower in the year, mainly due to adverse year-on-year timing movements. In 2021/22, there were £12 million of exceptional costs related to establishing our new operating model (2021: £14 million). Timing under-recoveries of £85 million in 2021/22 compared with over-recoveries of £42 million in 2020/21 are primarily due to the under-recovery of pass-through costs, inflation true-ups and last year’s collection of prior period under-recoveries, partly offset by an over-collection of Transmission Network Use of System (TNUoS) revenues in the current year. Adjusted operating profit reduced by £27 million (2%), but this included £127 million adverse year-on-year timing movements. Underlying operating profit increased by 10%. Net revenues (adjusted for timing) were higher under the first year of RIIO-T2, with indexation and lower totex capitalisation rates (increased ‘fast money’) offsetting the lower returns in the current year. In the prior year, revenue was impacted by an adverse MOD adjustment in the final year of the RIIO-T1 price control. Regulated controllable costs were higher from additional workload agreed for RIIO-T2, inflationary increases and the non-recurrence of favourable credits in 2020/21, which more than offset 2021/22 efficiency savings and the absence of prior period COVID-19-related costs. Other costs were higher, mainly relating to a £10 million settlement related to Western Link.  The increase in depreciation and amortisation reflects continued investment. In 2021/22, a benefit arising from the review of assets’ useful economic lives was broadly offset by asset write-offs. National Grid plc Annual Report and Accounts 2021/22 39

UK Electricity Distribution £m 2021/22 2020/21 Change Revenue 1,482 — n/a Operating costs (573) — n/a Statutory operating profit 909 — n/a Exceptional items — — n/a Adjusted operating profit 909 — n/a Timing (22) — n/a Underlying operating profit 887 — n/a Analysed as follows: Net revenue 1,357 — n/a Regulated controllable costs (180) — n/a Post-retirement benefits (24) — n/a Other operating costs (86) — n/a Depreciation and amortisation (158) — n/a Adjusted operating profit 909 — n/a Timing (22) — n/a Underlying operating profit 887 — n/a ‘UK Electricity Distribution’ refers to WPD, which was acquired on 14 June 2021. The results presented are for the 9.5-month period of ownership and no amounts for WPD are included in the consolidated results of the Group for year ended 31 March 2021. Statutory operating profit of £909 million for the 9.5 months included £22 million of timing over-recoveries of ‘Distribution Use of System’ (DUoS) volumes and the adverse impact on our revenues from UK corporation tax capital allowance ‘super deductions’, partly offset by an under-collection of earned incentives and inflation true-ups. Excluding timing, underlying profit was £887 million for the 9.5 months of ownership since June 2021. Controllable costs and post-retirement benefit costs of £204 million were lower than the estimated equivalent period in the prior year, mainly as a result of the disruption arising from COVID-19 during 2020/21. These costs include engineering management costs, supporting our customers and the maintenance of our four electricity distribution networks, including activities such as vegetation management in order to prevent line damage. Depreciation and amortisation charges include amortisation of fair value adjustments applied to property, plant and equipment (PP&E) at the date of acquisition. UK Electricity System Operator £m 2021/22 2020/21 Change Revenue 3,455 2,018 71% Operating costs (3,450) (2,071) 67% Statutory operating profit/(loss) 5 (53) (109) % Exceptional items 2 (7) (129) % Adjusted operating profit/(loss) 7 (60) (112) % Timing 47 130 (64) % Underlying operating profit 54 70 (23) % Analysed as follows: Net revenue 240 107 124% Controllable costs (129) (99) 30% Post-retirement benefits (16) (13) 23% Other operating costs (5) (9) (44) % Depreciation and amortisation (83) (46) 80% Adjusted operating profit/(loss) 7 (60) (112) % Timing 47 130 (64) % Underlying operating profit 54 70 (23) % UK Electricity System Operator statutory operating profit increased £58 million in the year. In 2021/22 there were £2 million of exceptional costs related to establishing our new operating model, compared to a £7 million credit related to release of previous reorganisation provisions in the prior year. Timing under-recoveries of £47 million in 2021/22 compared with under-recoveries of £130 million in the prior year. Timing in 2021/22 predominately included £44 million for the Balancing Services Use of System (BSUoS) price cap deferral support scheme compared with £109 million in 2020/21 for TNUoS demand under-recovery during COVID-19 and £22 million for the BSUoS Covid Support Scheme. Adjusted operating profit increased by £67 million almost entirely driven by the £83 million year-on-year timing movement, partly offset by asset impairments. Excluding the impact of timing, underlying operating profit decreased by 23%. Net revenue (adjusted for timing) was £50 million higher, reflecting higher revenues under RIIO-2 related to additional workload agreed under the new price control and higher earned incentives. Regulated controllable costs including pensions were £33 million higher in total, in line with the expected higher volume of work required to deliver the ambitious RIIO-2 business plan. Depreciation and amortisation was £37 million higher as a result of our investment in transformational IT systems, in addition to asset impairments for work that may no longer be required. New England £m  2021/22 2020/21 Change Revenue 4,550 4,214 8% Operating costs (3,786) (3,600) 5% Statutory operating profit 764 614 24% Exceptional items 80 8 900% Remeasurements (101) (11) 818% Adjusted operating profit 743 611 22% Timing 32 11 191% Major storm costs 111 105 6% Underlying operating profit 886 727 22% Analysed as follows: Net revenue 2,500 2,430 3% Regulated controllable costs (813) (810) — Post-retirement benefits (40) (43) (7) % Bad debt expense (45) (127) (65) % Other operating costs (494) (450) 10% Depreciation and amortisation (365) (389) (6) % Adjusted operating profit 743 611 22% Timing 32 11 191% Major storm costs 111 105 6% Underlying operating profit 886 727 22% New England statutory operating profit increased by £150 million, as a result of the £90 million year-on-year favourable movements in commodity contract remeasurements (which are passed on to customers), mostly offset by exceptional charges booked in the current year for the disposal of our Rhode Island business and the cost efficiency programme. In 2020/21, exceptional charges were lower, comprising £8 million of costs related to establishing our new operating model and transaction costs. Timing under-recoveries of £32 million in 2021/22 compared with timing under- recoveries of £11 million in 2020/21, related to revenue decoupling and recovery of cost on our energy efficiency programme. Storm costs (deferrable and non-deferrable) were broadly flat year-on-year, with a lower number of storm events occurring during 2021/22, but a higher ‘per storm’ cost. These factors, along with an adverse impact from COVID-19 in the prior year and exchange movements, resulted in an overall increase in statutory operating profit and adjusted operating profit. Financial review continued 40 National Grid plc Annual Report and Accounts 2021/22

Adjusted operating profit increased by £132 million (22%), including £21 million year-on-year adverse timing under-recoveries. Major storm costs of £111 million exceed our threshold to be excluded from underlying, but were a repeat of the high level of deferrable storm costs we incurred in 2020/21. Underlying operating profit increased by 22%. Net revenues (adjusted for timing) increased by £91 million from the benefits of rate case increments in Massachusetts Gas and Massachusetts Electric, capital trackers and higher revenues from new customer connections along with income from sale of property. New England controllable costs were held broadly flat year-on-year, with increases from higher workload, IT costs and inflationary impacts, being mostly offset by efficiency savings, favourable settlements and non-recurrence of costs incurred in the prior period including COVID-19 disruption costs. Provisions for bad and doubtful debts of £45 million were £82 million lower than 2020/21, which had additional provision for receivables related to the impact of COVID-19. Depreciation and amortisation increased due to the growth in assets, but was more than offset by a benefit from cessation of depreciation in NECO as a result of it being reclassified to held for sale. Other costs were higher due to increased property taxes and increases in environmental reserves. New York £m 2021/22 2020/21 Change Revenue 5,561 4,605 21% Operating costs (4,466) (3,910) 14% Statutory operating profit 1,095 695 58% Exceptional items (24) (7) n/a Remeasurements (291) (23) n/a Adjusted operating profit 780 665 17% Timing (126) 12 n/a Major storm costs 52 45 16% Underlying operating profit 706 722 (2) % Analysed as follows: Net revenue 3,400 3,136 8% Regulated controllable costs (963) (981) (2) % Post-retirement benefits (44) (47) (6) % Bad debt expense (87) (198) (56) % Other operating costs (989) (792) 25% Depreciation and amortisation (537) (453) 19% Adjusted operating profit 780 665 17% Timing (126) 12 n/a Major storm costs 52 45 16% Underlying operating profit 706 722 (2) % New York statutory operating profit increased by £400 million, principally as a result of the £268 million year-on-year favourable movements in commodity contract remeasurements (which are passed on to customers) and net exceptional gains including £38 million environmental insurance recovery for costs related to our obligations to clean up Superfund sites, compared to a £14 million environmental credit (reversal of cost previously booked as exceptional) in the prior year. Timing over-recoveries of £126 million in 2021/22 compared with timing under-recoveries of £12 million in 2020/21, driven by commodity price fluctuations and high auction sale prices on transmission wheeling. Major (i.e. deferrable) storm costs of £52 million were £7 million higher year-on-year, but as in 2020/21, the total costs passed our threshold ($100 million in aggregate with New England) and so are excluded from our underlying results. These factors, along with a prior year adverse impact from COVID-19 disruption resulted in an overall increase in statutory operating profit and in adjusted operating profit. Adjusted operating profit increased by £115 million (17%), aided by £138 million year-on-year favourable timing swings and lower year-on-year impact of COVID-19, but partly offset by higher environmental charges in 2021/22. After further adjusting to exclude the impact of timing and major storm costs, underlying operating profit decreased by 2%. Net revenues (adjusted for timing) increased by £126 million from the benefits of rate case increases in KEDNY, KEDLI and Niagara Mohawk (partly offset by use of deferral credits to reduce the impact on customer bill increases and a ‘make whole’ adjustment for the rate case settlement in downstate New York). Regulated controllable costs were lower year-on-year, with increased workload and IT costs and also inflationary impacts, more than offset by cost efficiency savings, favourable credits in 2021/22 and the non-recurrence of costs arising in 2020/21. Provisions for bad and doubtful debts decreased by £111 million, driven by 2020/21’s additional provision for receivables related to the impact of COVID-19. Depreciation and amortisation increased due to the growth in assets and the accelerated depreciation of certain gas assets and IT systems. Other costs were higher due to an increase in environmental provisions (mostly driven by inflation), increased property taxes, cost of removal and customer funded work, partly offset by receipt of a historical property tax refund. NGV and Other activities £m  2021/22 2020/21 Change Statutory operating profit 543 65 735% Exceptional items (236) 52 (554) % Adjusted operating profit 307 117 162% Timing — — n/a Underlying operating profit 307 117 162% Analysed as follows: NGV 286 185 55% Property 40 22 82% Corporate and Other activities (19) (90) (79) % Underlying operating profit 307 117 162% NGV’s statutory operating profits were £100 million higher than 2020/21, driven by higher interconnector revenues, which benefited from a full year’s contribution from our second French interconnector (IFA2) and the commissioning of North Sea Link earlier than expected, along with the impact of higher commodity prices and increased revenues in our onshore renewables in the US. These were partly offset by a write-down for assets damaged by a fire at Sellindge in September 2021, which caused an unplanned outage for our legacy French interconnector (IFA1) and a £3 million exceptional charge in relation to establishing our new operating model (2021: £2 million). In Other activities, we incurred an exceptional gain of £417 million related to the disposal of our 50% interest in the St William property joint venture and release of associated deferred income on historical sales made to the joint venture. We also incurred an exceptional charge of £22 million related to establishing our new operating model (2021: £26 million), £95 million (2021: £24 million) of transaction costs for the acquisition of WPD, and £61 million of costs incurred for the separation of NECO and UK Gas Transmission. In 2021/22, underlying operating profit of £21 million (including corporate costs), compared with net costs of £68 million in 2020/21. This increase included benefits from higher fair value gains on our NG Partners investments and the release of an aged liability related to historical balances for unclaimed dividends in the Group. Excluding the gain on disposal of St William, the underlying performance of the property business was up £18 million, driven by increased sales compared with 2020/21. National Grid plc Annual Report and Accounts 2021/22 41

Financing costs and taxation – continuing  Net finance costs  Net finance costs (excluding remeasurements) for the year were 25% higher than last year at £1,081 million, with the £216 million increase driven by interest costs of £130 million (net of amortisation of debt fair value adjustments) for debt acquired with WPD, £99 million of interest and fees for £8 billion of additional borrowings used to finance the acquisition, a £145 million impact of higher inflation on our RPI-linked debt and an increase in borrowings as a result of organic asset growth. These higher costs were partly offset by favourable year-on-year non-debt interest income, with benefits from interest on pension and other post- employment benefit (OPEB) liabilities, increased capitalised interest and higher levels of other interest income from US financial investments compared with 2020/21. The effective interest rate for continuing operations of 3.2% is in line with the prior year rate. Joint ventures and associates  The Group’s share of net profits from joint ventures and associates increased by £82 million compared with 2020/21, mainly as a result of higher interconnector revenues in both Nemo Link up £37 million and in BritNed up £28 million and higher sales in our St William property joint venture (prior to disposal of this investment in March 2022) and an improved contribution from our joint venture investment in NG Partners. Tax The underlying effective tax rate (excluding joint ventures and associates) of 24.3% was 260bps higher than last year (2020/21: 21.7%). The tax charge in 2021/22 included additional deferred tax charges in the UK for the change in the UK corporation tax rate and the unitary state deferred tax remeasurement which occurred as a result of the expected sale of our Rhode Island business in the US. The Group’s tax strategy is detailed later in this review. Discontinued operations  On 27 March 2021, we announced the agreed sale of 100% of our UK Gas Transmission business (including metering) to a new entity (the ‘Acquiring Entity’) in exchange for £2.2 billion cash consideration, £2.0 billion of debt financing and a 40% interest in the Acquiring Entity on completion. The other 60% in the Acquiring Entity will be owned by a consortium of Macquarie Infrastructure and Real Assets and British Columbia Investment Management Corporation. The sale is expected to complete in the third quarter of this financial year subject to the receipt of all regulatory approvals. The results of our 100% share of this business (including metering) are presented as ‘discontinued operations’ in 2021/22, with comparatives restated accordingly. On 1 September 2021, this business met the IFRS 5 criteria to be classified as held for sale and depreciation was stopped from that date. As described in note 10 to the financial statements, separation and transaction costs relating to the disposal of this business are included within discontinued operations. UK Gas Transmission (including metering) £m 2021/22 2020/21 Change Revenue 1,374 1,122 22% Operating costs (737) (628) 17% Statutory operating profit 637 494 29% Exceptional items 17 5 240% Adjusted operating profit 654 499 31% Timing 80 96 (17) % Adjusted operating profit (excluding timing) 734 595 23% Analysed as follows: Net revenue 977 889 10% Regulated controllable costs (160) (157) 2% Post-retirement benefits (17) (18) (6) % Other operating costs (55) (28) 96% Depreciation and amortisation (91) (187) (51) % Adjusted operating profit 654 499 31% Timing 80 96 (17) % Adjusted operating profit (excluding timing) 734 595 23% UK Gas Transmission statutory operating profit increased £143 million in the year. In 2021/22, there were £14 million of costs incurred in separating the business from the Group and transaction-related costs in preparation of the sales process; and £3 million (2021: £5 million) of exceptional costs related to the reorganisation and cost efficiency programme. Timing under-recoveries of £80 million arose in 2021/22, mainly related to recovery of shrinkage costs from higher gas prices. This compared with under-recoveries of £96 million in the prior year from under-collections relating to the change to the gas capacity charging regime and lower demand, partly offset by a lower return of prior period over-recoveries. Adjusted operating profit increased by £155 million (31%), including £16 million less adverse timing year-on-year. Excluding the impact of timing, adjusted operating profit increased by 23%, mostly from the cessation of depreciation since 31 August 2021, when the business was classified as held for sale. In 2021/22, depreciation of £91 million was £96 million lower than the prior year. Net revenue was £88 million higher, reflecting new prices under RIIO-T2 and the impact of the change to CPIH and regulatory depreciation profile change under the new price control. Regulated controllable costs (including pensions) and other costs were £29 million higher as a result of increased customer-funded works, higher Network Innovation Competition costs, higher meter displacements and a beneficial provision release in the prior period. Within UK Gas Transmission, our non-regulated metering business’s operating profit of £150 million was in line with the prior year, with the benefit from lower depreciation being offset by the adverse impact of fewer meters as these are being phased out and replaced by smart meters. Financial review continued 42 National Grid plc Annual Report and Accounts 2021/22

Capital investment, asset growth and Value Added Value Added is a measure that reflects the value to shareholders of our dividend and the growth in National Grid’s regulated and non-regulated assets (as measured in our regulated asset base, for regulated entities), net of the growth in overall debt. It is a key metric used to measure our performance and underpins our approach to sustainable decision-making. Value Growth, which is derived from Value Added, forms part of our long-term management incentive arrangements. A key part of our investor proposition is growth in our regulated asset base. The regulated asset base is a regulatory construct, representing the invested capital on which we are authorised to earn a cash return. By investing efficiently in our networks, we add to our regulatory asset base over the long term and this in turn contributes to delivering shareholder value. Our regulated asset base comprises our regulatory asset value in the UK, plus our rate base in the US. We also invest in related activities that are not subject to network regulation and this further contributes to asset growth. Capital investment Capital investment comprises capital expenditure in critical energy infrastructure, equity investments, funding contributions and loans to joint ventures and associates and, in the case of National Grid Partners, investments in financial assets. At actual exchange rates  At constant currency  £m 2021/22 2020/21 Change 2021/22 2020/21 Change UK Electricity Transmission 1,195 984 21% 1,195 984 21% UK Electricity Distribution 899 — n/a 899 — n/a UK Electricity System Operator 108 88 23% 108 88 23% New England 1,561 1,437 9% 1,561 1,429 9% New York 1,960 1,738 13% 1,960 1,729 13% NGV and Other activities 1,016 596 70% 1,016 596 70% Continuing 6,739 4,843 39% 6,739 4,826 40% Discontinued 261 204 28% 261 204 28% Total Group 7,000 5,047 39% 7,000 5,030 39% Capital investment in UK Electricity Transmission increased by £211 million compared with 2020/21, primarily due to London Power Tunnels 2 and Hinkley-Seabank, partly offset by lower Smartwires spend. The acquisition of WPD during the year resulted in a £899 million increase in reported capital investment year-on-year. In New England, capital investment was up £132 million on a constant currency basis, reflecting higher spend on gas assets driven by decreased COVID-19 restrictions compared with 2020/21 and higher investment in electric assets related to asset condition. In New York, capital investment was £231 million higher (on a constant currency basis), as a result of accelerated leak-prone pipe replacement work in our gas businesses, investment in Northwest Nassau connection, higher investment in our electric assets to reinforce the network and increase capacity and reliability, investment in SmartPath Connect and Energy Highway, and decreased COVID-19 restrictions compared with 2020/21. Capital investment in NGV was significantly higher than in 2020/21, with continued investment in the Viking Link interconnector (Denmark), increased spend on our Grain LNG facility, partly offset by completion of the North Sea Link interconnector (Norway) this year, but a £373 million step up in US Ventures’ capital investment, including purchase of a 3.2 GW potential offshore wind seabed lease in New York. In addition, a total amount of £93 million was invested by National Grid Partners in 2021/22, compared to £38 million in the prior year. In UK Gas Transmission, capital investment increased by £57 million from non-load spend, with increased work at St Fergus, continued investment at Peterborough and Huntingdon compressor stations, increased investment at Hatton and higher cyber spend compared to 2020/21. Asset Growth and Value Added To help readers’ assessment of the financial position of the Group, the table below shows an aggregated position for the Group, as viewed from a regulatory perspective. The measures included in the table below are calculated in part from financial information used to derive measures sent to and used by our regulators in the UK and US, and accordingly inform certain of the Group’s regulatory performance measures, but are not derived from, and cannot be reconciled to, IFRS. These alternative performance measures include regulatory assets and liabilities and certain IFRS assets and liabilities of businesses that are classified as held for sale under IFRS 5. There are certain significant assets and liabilities included in our IFRS balance sheet, which are treated differently in the analysis below, and to which we draw readers’ attention. Our UK OpCo RAVs are different to the IFRS carrying value of PP&E and intangibles in these entities. This is a result of the annual indexation (inflationary uplift) adjustment applied to RAV compared with the IFRS value of these assets (which are held at amortised cost), or in the case of WPD, the result of acquisition fair value adjustments (where PP&E at acquisition has been valued above RAV). In addition, under IFRS we recognise liabilities in respect of US environmental remediation costs, and pension and OPEB costs. For regulatory purposes, these are not shown as obligations because we are entitled to full recovery of costs through our existing rate plans. The impact of US tax reform in 2017/18 which resulted in a reduction in IFRS deferred tax liabilities, and from a regulatory perspective remains as a future obligation, results in a regulatory liability within US rate base (£0.7 billion in New England and £0.9 billion in New York at 31 March 2022). In our Value Added calculation, we have recognised an asset to reflect expected future recovery of £202 million COVID-19-related provision for bad and doubtful debts that we have included in 2021/22 (2021: £179 million). Regulatory IOUs which reflect net over- or under-recoveries compared with our regulatory allowances are treated within this table as obligations but do not qualify for recognition as liabilities (or assets) under IFRS. The increase in regulatory assets and other balances (including goodwill) and the increase in net debt as a result of the WPD acquisition along with associated transaction costs have been excluded when calculating the in-year Value Added for 2021/22. However, these balances are included within amounts reported as at 31 March 2022. Adjusted net debt movements exclude movements on derivatives which are designated in cash flow hedging arrangements and for which there is no corresponding movement in total assets and other balances. Within our Value Added calculation, total assets and other balances, goodwill and adjusted net debt movement all exclude the impact of reclassifications to held for sale for NECO in 2020/21 and the UK Gas business in 2021/22. Separation and transaction costs related to the disposal of these entities are also excluded from in-year Value Added and have been deferred to match against the anticipated proceeds on disposal of these businesses in 2022/23. National Grid plc Annual Report and Accounts 2021/22 43

The table below includes related balances and net debt for UK Gas Transmission and Metering and NECO, despite being reclassified as held for sale under IFRS. 2021/22 2020/21 £m 31 March 2022 Acquisition of WPD1 31 March 20212 Value Added Change 31 March 2021 31 March 2020 Change UK RAV 31,593 8,476 20,876 2,241 11 % 20,872 20,431 2 % US rate base 22,178 — 20,687 1,491 7 % 20,041 18,598 8 % Total RAV and rate base 53,771 8,476 41,563 3,732 9 % 40,913 39,029 5 % NGV and Other 5,226 — 4,920 306 6 % 4,458 3,942 13 % Total assets 58,997 8,476 46,483 4,038 9 % 45,371 42,971 6 % UK other regulated balances3 84 230 (140) (6) (160) (368) US other regulated balances4 2,621 — 1,995 626 1,974 1,613 Other balances (878) (168) (336) (374) (336) (514) Total assets and other balances 60,824 8,538 48,002 4,284 46,849 43,702 3,147 Cash dividends 922 1,413 Adjusted net debt movement1 (1,373) (2,752) Value Added 3,833 1,808 1. The acquisition of WPD on 14 June 2021 resulted in an increase in assets which has been excluded from the total change in the year used to calculate Asset Growth and Value Added for 2021/22. The increase in goodwill and intangible licence recognised on the acquisition of WPD and the associated fair value of net debt acquired and cash proceeds (along with associated transaction costs) are excluded from the total adjusted net debt movement in the year used to calculate Asset Growth and Value Added. 2. March 2021 balances restated for segmental changes and to correspond with 2020/21 regulatory filings and calculations. 3. Includes totex-related regulatory IOUs of £271 million (2021: £293 million), under-recovered timing balances of £346 million (2021: £153 million over-recovered) and under-recovered legacy balances related to previous price controls of £9 million (2021: £nil). 4. Includes assets for construction work-in-progress of £2,139 million (2021: £1,671 million), other regulatory assets related to timing and other cost deferrals of £759 million (2021: £714 million) and net working capital liabilities of £277 million (2021: £390 million). Figures relating to prior periods have, where appropriate, been re-presented at constant currency, for opening balance adjustments following the completion of the UK regulatory reporting pack process in 2021 and finalisation of US balances. During 2021/22, our combined regulated asset base and NGV and Other businesses’ assets grew by £4.0 billion or 9% on a constant currency basis compared with an increase of 6% in the prior year. UK RAV growth was 10.7% including CPIH indexation of 6.2% and RPI indexation of 9.0% while US rate base grew strongly by 7.2%.  Value Added, which reflects the key components of value delivery to shareholders (i.e. dividend and growth in the economic value of the Group’s assets, net of growth in net debt) was £3.8 billion in 2021/22. This was higher than last year’s £1.8 billion, with £1.0 billion of the year-on-year increase arising from higher RAV indexation in UK Transmission, £0.8 billion of RAV growth from WPD (for the 9.5 months owned in 2021/22), stronger NGV and Other performance, higher US returns and a smaller adverse impact from COVID-19 compared with 2020/21, offset by higher interest and increased tax paid. Of the £3.8 billion Value Added, £0.9 billion was paid to shareholders as cash dividends and £2.9 billion was retained in the business. Value Added per share was 106.5p compared with 51.3p in 2020/21.  Financial review continued 44 National Grid plc Annual Report and Accounts 2021/22

Cash flow, net debt and funding  Net debt is the aggregate of cash and cash equivalents, borrowings, current financial and other investments and derivatives (excluding commodity contract derivatives) as disclosed in note 29 to the financial statements. ‘Adjusted net debt’ used for the RCF/adjusted net debt calculation is principally adjusted for pension deficits and hybrid debt instruments. For a full reconciliation see page 274. The following table summarises the Group’s cash flow for the year, reconciling this to the change in net debt. Summary cash flow statement £m  2021/22 2020/21 Change Cash generated from continuing operations 5,788 3,967 46% Cash capital expenditure and acquisition of investments (5,781) (4,741) 22% Disposal of St William joint venture 413 — n/a Dividends from joint ventures and associates 166 80 108% Business net cash inflow/(outflow) from continuing operations 586 (694) (184) % Net interest paid (1,013) (737) 37% Net tax paid (298) (91) 227% Ordinary dividends (922) (1,413) (35%) Other cash movements 30 14 114% Net cash outflow from continuing operations (1,617) (2,921) (45) % Acquisition of WPD1 (7,837) — n/a Discontinued operations 657 408 n/a Proceeds from bridge loan taken out to acquire WPD 8,200 — n/a Other net cash flows from investing and financing transactions 628 2,608 n/a Increase/(decrease) in cash and cash equivalents 31 95 (67) % Reconciliation to movement in net debt Increase/(decrease) in cash and cash equivalents 31 95 (67) % Increase in borrowings for bridge loan (8,200) — n/a Less: other net cash flows from investing and financing transactions (628) (2,608) n/a Cash and borrowings reclassified as held for sale at end of year 4,063 1,119 n/a Fair value of net debt acquired with WPD (8,147) — n/a Other non-cash movements in net debt (1,382) 1,438 n/a Increase in net debt (14,263) 44 n/a Net debt at start of year (28,546) (28,590) —% Net debt at end of year (42,809) (28,546) 50.0% 1. Includes £44 million cash and cash equivalents acquired with WPD Cash flow generated from continuing operations was £5.8 billion, £1,821 million higher than last year, mainly due to the contribution from WPD, lower adverse year-on-year timing under-recoveries, higher revenues compared to 2020/21, higher spend on provisions and exceptional charges, offset by favourable working capital inflows on payables. Cash expended on investment activities increased as a result of continued organic growth in our regulated and non-regulated businesses, the impact of acquiring WPD, partly offset by disposal of financial investments. The disposal of our St William investment in March 2022 generated £413 million of proceeds in the year. The cash acquisition of WPD in June 2021 for £7.9 billion increased net debt, along with a further £8.2 billion increase from the fair value of net debt acquired. Net interest paid increased as a result of the bridge loan taken out to finance the purchase of WPD, interest for borrowings acquired with WPD and increased base rates on borrowings. The Group made net tax payments of £298 million during 2021/22. The cash dividend of £922 million, reflected a higher scrip uptake of 48% (2021: 17%). Discontinued operations represents UK Gas Transmission and Metering which generated higher cash inflows in 2021/22, principally as a result of improved year-on-year performance and no pension deficit payments in 2021/22. Non-cash movements primarily reflect changes in the sterling- dollar exchange rate, accretions on index-linked debt, lease additions and other derivative fair value movements, offset by the amortisation of fair value adjustments on the debt acquired with WPD. Closing net debt of £42.8 billion excludes £1.2 billion of net debt in NECO and £4.1 billion of net debt in NG Gas plc which has been classified as held for sale on 31 March 2022. During the year we raised over £4.2 billion of new long-term senior debt to refinance maturing debt and to fund a portion of our significant capital programme. The new bonds issued include further borrowings under our Green Financing Framework. In addition, we raised £8.2 billion under a bridge financing facility to fund the purchase of the UK Electricity Distribution business. This bridge facility remained outstanding at 31 March 2022 as we continue to progress the sales of our US Rhode Island business and our UK Gas Transmission business. We expect the proceeds from these sales to be received, and for the bridge facility to be repaid in full, this financial year (2022/23). As at 18 May 2022, we have £6.8 billion of undrawn committed facilities available for general corporate purposes, including £350 million related to National Grid Gas plc, all of which have expiry dates beyond May 2023. National Grid’s balance sheet remains robust, with strong investment grade ratings from Moody’s, Standard & Poor’s (S&P) and Fitch. The Board has considered the Group’s ability to finance normal operations as well as funding a significant capital programme, taking account of the disruption caused by the energy crisis. This includes stress-testing of the Group’s finances under a ‘reasonable worst case’ scenario, assessing the timing of the NECO and National Grid Gas plc transactions, and the further levers at the Board’s discretion to ensure our businesses are adequately financed. As a result, the Board has concluded that the Group will have adequate resources to do so. National Grid plc Annual Report and Accounts 2021/22 45

Financial position  The following table sets out a condensed version of the Group’s IFRS balance sheet.  Summary balance sheet  £m  31 March 2022 31 March 2021 Change Goodwill and intangibles 12,804 6,031 112% Property, plant and equipment 57,532 47,043 22% Assets and liabilities held for sale 2,812 3,557 (21) % Other net assets/(liabilities) (334) (1,896) (82) % Tax balances (6,685) (4,817) 39% Net pension asset/(liabilities) 3,075 715 330% Provisions (2,539) (2,227) 14% Net debt (42,809) (28,546) 50% Net assets 23,856 19,860 20% Goodwill and intangibles increased as a result of the acquisition of WPD during the year. Property, plant and equipment increased as a result of the continuing capital investment programme, the acquisition of WPD and foreign exchange gains offset by reclassifications to held for sale. Assets held for sale comprises assets and liabilities of NECO and UK Gas Transmission (including metering) both of which we expect to sell during 2022/23 (see note 10 to the financial statements). Tax balances increased principally as a result of the acquisition of WPD, deferred tax on actuarial gains on pension assets, accelerated tax depreciation from ongoing capital investment and the impact of the UK tax rate change on deferred tax balances. Net pension assets increased in both the US and UK as a result of higher asset valuations from investment returns, higher discount rates on liabilities and foreign exchange movements along with the acquisition of WPD. Provisions were higher principally as a result of increases in environmental and other provisions, the impact of acquiring WPD and foreign exchange movements. Other movements are largely explained by net working capital inflows, reclassifications to held for sale, the impact of the acquisition of WPD and changes in the sterling-dollar exchange rate. Regulatory gearing, measured as net debt as a proportion of total regulatory asset value and other business invested capital increased significantly in the year to 81% as at 31 March 2022. This was up from 65% at the previous year end, principally as a result of an £8 billion ‘bridge loan’ used to acquire the equity of WPD and £8 billion fair value of net debt acquired with WPD. The proceeds from the sales of NECO and UK Gas Transmission expected to occur in 2022/23 will be used to repay this loan, which would substantially reduce the level of gearing in the Group. Taking into account the benefit of our hybrid debt, adjusted gearing as at 31 March 2022 was 80%. Once this bridge loan is repaid, gearing should return to a level appropriate for the current overall Group credit rating of BBB+/Baa1 (S&P/Moody’s).  Retained cash flow as a proportion of adjusted net debt was 8.9%. This is above the long-term average level of 7% indicated by Moody’s, as consistent with maintaining our current Group rating. Off-balance sheet items  There were no significant off-balance sheet items other than the commitments and contingencies detailed in note 30 of the financial statements.  Economic returns  In addition to Value Added, one of the principal ways in which we measure our performance in generating value for shareholders is to divide regulated financial performance by regulatory equity, to produce RoE.  As explained on page 274, regulated financial performance adjusts reported operating profit to reflect the impact of the Group’s various regulatory economic arrangements in the UK and US. In order to show underlying performance, we calculate RoE measures excluding exceptional items of income or expenditure.  Group RoE is used to measure our performance in generating value for our shareholders by dividing regulated and non-regulated financial performance, after interest and tax, by our measure of equity investment in all our businesses, including the regulated businesses, NGV and Other activities and joint ventures. Group RoE includes our UK Gas Transmission business. Regulated RoEs are measures of how the businesses are performing compared with the assumptions and allowances set by our regulators. US jurisdictional and UK entity regulated returns are calculated using the capital structure assumed within their respective regulatory arrangements and, in the case of the UK, assuming inflation of 3% RPI under RIIO-1 and 2% CPIH under RIIO-2. As these assumptions differ between the UK and the US, RoE measures are not directly comparable between the two geographies. In our performance measures, we compare achieved RoEs to the level assumed when setting base rate and revenue allowances in each jurisdiction.  Return on Equity £m  2021/22 2020/21 Change UK Electricity Transmission 7.7 % 13.8 % -610 bps UK Electricity Distribution 13.6 % n/a n/a UK Gas Transmission 7.8 % 9.6 % -180 bps New England 8.3 % 7.5 % 80 bps New York 8.8 % 6.7 % 210 bps Group Return on Equity¹ 11.4 % 10.6 % 80 bps 1. Group RoE methodology amended in 2021/22 to calculate accretion charge on inflation-linked debt at long-run inflation rates. This provides alignment to treatment of RAV indexation in the metric. Prior year comparatives have not been restated. As a result of the new RIIO-2 price control, the allowed returns that UK Electricity Transmission and UK Gas Transmission can earn have decreased compared with the allowed returns under RIIO-1. In 2021/22, UK Electricity Transmission achieved operational returns of 7.7%, 140bps higher than base allowed return under RIIO-2, mainly from totex performance related to savings on capital delivery. UK Electricity Distribution achieved an operational return of 13.6% in 2021/22 under RIIO-1, or 400bps outperformance, mostly as a result of strong incentives performance, but also totex outperformance driven by efficient capital expenditure. UK Gas Transmission’s return decreased due to lower returns allowed under the new RIIO-2 price control, but achieved operational returns in 2021/22 were 7.8%, 110bps higher than allowed, from totex outperformance, driven by cost efficiencies and incentives. New England’s achieved return of 8.3% was 85% of the allowed return of 9.8% in 2021/22 as a result of higher IT and workforce costs, but this was an improvement on the achieved return of 7.5% or 77% of the allowed return in 2020/21, driven by rate increases and a smaller adverse impact from COVID-19 compared with the prior year. New York’s achieved return of 8.8% was 99% of the allowed return of 8.9% in 2021/22. This was an improvement compared with an achieved return of 6.7% in 2020/21, as a result of new rate agreements and a property tax rebate in the current year, and non-deferrable storm costs exceeding allowances plus non-recurring charges in the prior year. The quoted returns for New England and New York represent the weighted average return across OpCos within each jurisdiction. US returns were not affected by the COVID-19-related bad debt provisions recognised in 2020/21 which included an adjustment reflecting our expectation for future recovery of these bad debt costs. Overall Group RoE, which incorporates NGV, Property, Corporate and Other plus financing and tax performance was 11.4%.  Financial review continued 46 National Grid plc Annual Report and Accounts 2021/22

Tax transparency As a responsible taxpayer, we have voluntarily included additional tax disclosures, which we believe are of significant interest to many of our stakeholders. Tax strategy National Grid is a responsible taxpayer. Our approach to tax is consistent with the Group’s broader commitments to doing business responsibly and upholding the highest ethical standards. This includes managing our tax affairs, as we recognise that our tax contribution supports public services and the wider economy. We endeavour to manage our tax affairs so that we pay and collect the right amount of tax, at the right time, in accordance with the tax laws in all the territories in which we operate. We will claim valid tax reliefs and incentives where these are applicable to our business operations, but only where they are widely accepted through the relevant tax legislation such as those established by government to promote investment, employment and economic growth. We do not have operations in tax havens or low tax jurisdictions without commercial purpose. We have a strong governance framework and our internal control and risk management framework helps us manage risks, including tax risk, appropriately. We take a conservative approach to tax risk. However, there is no prescriptive level or pre-defined limit to the amount of acceptable tax risk. Our financial statements have been audited. The figures in the tax transparency disclosures in the Annual Report and Accounts have been taken from our financial systems, which are subject to our internal control framework. We act with openness and honesty when engaging with relevant tax authorities and seek to work with tax authorities on a real-time basis. We engage proactively in developments of external tax policy and engage with relevant bodies where appropriate. Ultimate responsibility and oversight of our tax strategy and governance rests with the Finance Committee, with executive management delegated to our Chief Financial Officer who oversees and approves the tax strategy on an annual basis. For more detailed information, please refer to our published global tax strategy on our website.  Country-by-country reporting summary We have disclosed in the table below data showing the scale of our activities in each of the countries we operate in. This allows our stakeholders to see the profits earned, taxes paid and the context of those payments. 2021/22 Revenue Profit/ (loss) before income tax3 £m Income tax accrued – current year4 £m Tangible assets/ (liabilities) other than cash and cash equivalents5 £mTax jurisdiction Unrelated party1 £m Related party2 £m Total £m United Kingdom 9,165 122 9,287 2,501 290 27,846 United States 10,646 45 10,691 1,395 6 29,686 Isle of Man — 18 18 (48) — — Luxembourg — — — — — — Netherlands — 33 33 — — — Guernsey6 — 4 4 — — — Cross-border consolidation — — — — — — Total 19,811 222 20,033 3,848 296 57,532 2020/21 Revenue Profit/ (loss) before income tax3 £m Income tax accrued – current year4 £m Tangible assets/ (liabilities) other than cash and cash equivalents5 £mTax jurisdiction Unrelated party1 £m Related party2 £m Total £m United Kingdom 5,482 106 5,588 1,718 213 20,796 United States 9,297 43 9,340 341 3 26,247 Isle of Man — 15 15 23 — — Luxembourg — — — 1,667 — — Netherlands — 52 52 1 — — Guernsey — — — — — — Cross-border consolidation — — — (1,667) — — Total 14,779 216 14,995 2,083 216 47,043 1. Unrelated party revenue comprises revenue from continuing operations of £18,449 million (2021: £13,665 million) and revenue from discontinued operations of £1,362 million (2021: £1,114 million). 2. Related party revenue only includes cross-border transactions and comprises related party revenue from continuing operations of £189 million (2021: £164 million) and related party revenue from discontinued operations of £33 million (2021: £52 million). 3. Profit/(loss) before income tax (PBT) from operations after exceptionals comprises continuing operations PBT of £3,441 million (2021: £1,664 million) and discontinued operations PBT of £407 million (2021: £419 million). 4. Current year income tax accrued comprises current year income tax from continuing operations of £261 million (2021: £160 million) and current year income tax from discontinued operations of £35 million (2021: £56 million). See the tax charge to tax paid reconciliation below for further information. 5. Tangible assets comprises property, plant and equipment and excludes tangible fixed assets for business classified as held for sale of £7,892 million (UK Gas Transmission £4,719 million, NECO £3,173 million) (2021: NECO £2,713 million). 6. The Guernsey captive was acquired as part of the acquisition of the WPD Group during the year ended 31 March 2022. Our Hong Kong entity is UK tax resident and is now dormant and our entities in Australia and Canada are dormant. Our entity in Ireland is in liquidation and our entities in Jersey were fully liquidated and dissolved during the period. Therefore, those jurisdictions have not been included in the table above. Our Isle of Man and Guernsey companies are captive insurance companies which are treated as controlled foreign companies for UK tax purposes and as such UK corporation tax is paid on their profits by National Grid. In the Netherlands, we have a finance company which borrowed money externally and on-lent it to another Group company. Both loans have now been settled. It is taxed on its profits in the Netherlands at the corporate tax rate of 25%. As part of our response to the Labour Party’s proposal to nationalise nearly all of National Grid’s UK assets we implemented measures, which included a Luxembourg holding company, in order to strengthen our ability to get a fair value for the assets in the event of a nationalisation. Transfer pricing is not a significant issue for the Group since there are limited transactions between Group companies, but any transactions between related parties are made on an arm’s-length basis and aligned to OECD principles. National Grid plc Annual Report and Accounts 2021/22 47

Group’s total tax charge to tax paid The total tax charge for the year disclosed in the financial statements in accordance with accounting standards and the equivalent total corporate income tax paid during the year will differ. The principal differences between these two measures are as follows:  Reconciliation of Group’s total tax charge to tax paid (continuing and discontinued) £m 2021/22 2020/21 Total Group tax charge1 1,494 442 Adjustment for Group non-cash deferred tax (1,233) (218) Adjustments for Group current tax (charge)/credit in respect of prior years 35 (8) Group current tax charge 296 216 Group tax instalment payments (repayable)/payable in the following year (1) (7) Tax recoverable offset against current tax payments due — (55) Tax instalment payments overpaid in the current year 18 — Group tax payments/(refunds) in respect of prior years paid in the current year 15 (8) Group tax payments relating to tax disclosed elsewhere in the financial statements 3 11 Group tax paid2 331 157 Profit before income tax3 3,848 2,083 % % Effective cash tax rate4 8.6 7.5 Effective tax rate5 38.8 21.2 1. Total Group tax charge from operations after exceptionals comprises tax charges of continuing operations of £1,258 million (2021: £360 million) and discontinued operations of £236 million (2021: £82 million). 2. Total Group tax paid comprises tax paid for continuing operations of £298 million (2021: £91 million) and discontinued operations of £33 million (2021: £66 million). 3. PBT from continuing operations after exceptionals comprises continuing operations PBT of £3,441 million (2021: £1,664 million) and discontinued operations PBT of £407 million (2021: £419 million). 4. Effective cash tax rate for continuing operations after exceptionals is 8.8% (2021: 5.5%) and discontinued operations is 8.1% (2021: 15.8%). 5. Effective tax rate for continuing operations after exceptionals is 36.6% (2021: 21.6%) and discontinued operations is 57.5% (2021: 19.6%). Effective cash tax rate The effective cash tax rate for the total Group is 8.6%. The difference between this and the accounting effective rate of 38.8% is due to the following factors. An increase in future tax rates impacting the calculation of deferred taxes. National Grid is a capital-intensive business, across both the UK and the US, and as such invests significant sums each year in its networks. In 2021/22 the Group’s total capital expenditure was £6,446 million. To promote investment, tax legislation allows a deduction for qualifying capital expenditure at a faster rate than the associated depreciation in the statutory accounts. The impact of this is to defer cash tax payments into future years. In the current period, the US federal taxable income was offset by brought- forward net operating losses which primarily arose from deductions for qualifying capital expenditure incurred by National Grid in earlier years. Hence no significant federal tax payments were made in the current period. The Group continued to make significant payments into some of the UK defined benefit pension schemes. These payments have further reduced the overall cash tax paid in the UK. Group’s total tax contribution  The total amount of taxes we pay and collect globally year-on-year is significantly more than just the tax which we pay on our global profits. To provide a full picture, we have disclosed the Group’s global total tax contribution which includes contributions from both continuing and discontinued businesses. Group’s total tax contribution 2021/22 (taxes paid/collected) Taxes borne Taxes collected Key: £m u People 221 u Product 206 u Profit 331 u Property 1,191 u Miscellaneous 15 Total 1,964 Key: £m u People 697 u Product 1,056 u Miscellaneous 2 Total 1,755 2021/22 Tax contribution Tax jurisdiction Income tax paid/ (repaid) on cash basis1 £m Property taxes £m Other taxes borne £m Taxes collected £m Total tax contribution £m Number of employees2 as at 31 March 2022 United Kingdom 315 302 114 1,110 1,841 13,424 United States 16 889 328 645 1,878 17,332 Ireland — — — — — — Isle of Man — — — — — — Luxembourg — — — — — — Netherlands — — — — — — Total 331 1,191 442 1,755 3,719 30,756 1. See the tax charge to tax paid reconciliation above for further information. 2. Number of employees is calculated as the total National Grid workforce across all parts of the business, including Non-executive Directors and Executive Directors. All are active, permanent employees as well as both full-time and part-time employees. 2020/21 Tax contribution Tax jurisdiction Income tax paid/ (repaid) on cash basis1 £m Property taxes £m Other taxes borne £m Taxes collected £m Total tax contribution £m Number of employees2 as at 31 March 2021 United Kingdom 158 225 58 672 1,113 6,657 United States (1) 816 309 602 1,726 17,026 Ireland — — — — — — Isle of Man — — — — — — Luxembourg — — — — — — Netherlands — — — — — — Total 157 1,041 367 1,274 2,839 23,683 1. See the tax charge to tax paid reconciliation above for further information. 2. Number of employees is calculated as the total National Grid workforce across all parts of the business, including Non-executive Directors and Executive Directors. All are active, permanent employees as well as both full-time and part-time employees. Financial review continued 48 National Grid plc Annual Report and Accounts 2021/22

For 2021/22, our total tax contribution globally was £3,719 million (2020/21: £2,839 million), taxes borne were £1,964 million (2020/21: £1,565 million) and taxes collected were £1,755 million (2020/21: £1,274 million). Our taxes borne have increased in the year primarily due to higher income taxes paid. Taxes collected have increased as a result of higher indirect taxes. Approximately two thirds of the tax borne by the Group continues to be in relation to property taxes, of which £889 million are paid in the US across over 1,100 cities and towns in Massachusetts, New Hampshire, New York, Rhode Island and Vermont. These taxes are the municipalities’ principal source of revenue to fund school districts, police and fire departments, road construction and other local services. In the UK, we participate in the 100 Group’s Total Tax Contribution Survey. The survey ranks the UK’s biggest listed companies in terms of their contribution to the total UK government’s tax receipts. The most recent results of the survey for 2020/21 ranks National Grid as the 19th highest contributor of UK taxes (2019/20: 19th), the 15th highest in respect of taxes borne (2019/20: 11th) and the 3rd highest in respect of capital expenditure (£1,594 million; 2019/20: £1,663 million) on fixed assets (2019/20: 6th). Our ranking in the survey is proportionate to the size of our business and capitalisation relative to the other contributors to the survey. However, National Grid’s contribution to the UK and US economies is broader than just the taxes it pays over to and collects on behalf of the tax authorities. Both in the UK and the US we employ thousands of individuals directly. We also support jobs in the construction industry through our capital expenditure, which in 2021/22 was £6,446 million, as well as supporting a significant number of jobs in our supply chain. Furthermore, as a utility we provide a core essential service which allows the infrastructure of the country/states we operate in to run smoothly. This enables individuals and businesses to flourish and contribute to the economy and society. Development of future tax policy  We believe that the continued development of a coherent and transparent tax policy across the Group is critical to help drive growth in the economy. We continue to engage on consultations with policymakers where the subject matter impacts taxes borne or collected by our business, with the aim of openly contributing to the debate and development of tax legislation for the benefit of all our stakeholders. To ensure that the needs of our stakeholders are considered in the development of tax policy we are a member of a number of industry groups which participate in the development of future tax policy, such as the Electricity Tax Forum and CBI Employment Taxes Working Group, together with the 100 Group in the UK, which represents the views of Finance Directors of FTSE 100 companies and several other large UK companies. We undertake similar activities in the US, where the Group is an active member in the Edison Electric Institute, the American Gas Association, the Global Business Alliance, the American Clean Power Association, the Energy Storage Association and the Solar Energy Industries Association. Feedback from these groups, such as the results of the 100 Group Total Tax Contribution Survey, and consideration of third party reporting frameworks like the GRI (Global Reporting Initiative) helps to ensure that we consider the needs of our stakeholders and are engaged at the earliest opportunity on tax issues which affect our business. Pensions  In 2021/22, defined benefits pensions and other post-retirement benefits operating costs increased to £321 million (2020/21: £302 million) with £66 million related to an increase from the acquisition of WPD in 2021/22. During the year, our pensions and other post-retirement benefit plans improved from a net surplus position of £715 million at 31 March 2021 to a net surplus of £3,075 million at 31 March 2022. This was principally the result of actuarial gains on plan assets of £0.8 billion (as a result of higher investment returns) and actuarial gains on plan liabilities of £1.6 billion (reflecting higher discount rates from corporate bond yields net of higher expectations for long-term RPI inflation). The acquisition of WPD in June 2021 increased the Group’s net pension surplus by £566 million, but this was offset by the reclassification of National Grid Gas plc’s section of the NGUKPS (£664 million in surplus) at 31 March 2022 to held for sale. Employer contributions during the year were £300 million (2020/21: £274 million), including £84 million (2020/21: £88 million) of deficit contributions. As at 31 March 2022, the total UK and US assets and liabilities and the overall net IAS 19 (revised) accounting surplus (2020/21: surplus) is shown below. Further information can be found in note 25 to the financial statements.  Net pension and other post-retirement obligations  UK  US  Total  Plan assets (£m) 16,865 10,148 27,013 Plan liabilities (£m) (14,275) (9,663) (23,938) Net surplus (£m) 2,590 485 3,075 As at 31 March 2022, we recognised in the statement of financial position pension assets of £3,885 million (UK pensions £2,668 million; US pensions £732 million; and US other £485 million) and pensions liabilities of £810 million (UK pensions £78 million; US pensions £248 million; and US other £484 million). Dividend The Board has recommended an increase in the final dividend to 33.76p per ordinary share ($2.0929 per American Depository Share), which will be paid on 17 August 2022 to shareholders on the register of members as at 6 June 2022. If approved, this will bring the full-year dividend to 50.97p per ordinary share, an increase of 3.7% over the 49.16p per ordinary share in respect of the financial year ended 31 March 2021. This is in line with the increase in average UK CPIH inflation for the year ended 31 March 2022 as set out in our dividend policy. Our aim is to grow the annual dividend in line with CPIH, thus maintaining the dividend per share in real terms. The Board will review this policy regularly, taking into account a range of factors including expected business performance and regulatory developments. At 31 March 2022, National Grid plc had £12 billion of distributable reserves, which is sufficient to cover more than five years of forecast Group dividends. If approved, the final dividend will absorb approximately £1.2 billion of shareholders’ funds. This year’s dividend is covered approximately 1.3x by underlying earnings. The Directors consider the Group’s capital structure and dividend policy at least twice a year when proposing an interim and final dividend and aim to maintain distributable reserves that provide adequate cover for dividend payments. New accounting standards We did not adopt any new accounting standards in 2021/22. Amendments to certain existing accounting standards were adopted during the year, but these had no material impact on the Group’s results or financial statement disclosures.  Post balance sheet events On 6 April 2022, the UK government announced that ESO will become part of an independent system operator public body, following the Future System Operator consultation. On 11 May 2022, Ofgem approved the Group’s request to return £200 million of interconnector revenues subject to the cap and floor regime to consumers ahead of schedule. For further details, see note 38 to the financial statements. National Grid plc Annual Report and Accounts 2021/22 49

UK Electricity Transmission We performed well in 2021/22 as we maintained our focus on safe, customer-led, reliable, innovative and efficient operations to drive forward the net zero agenda. Western Link delivers green energy to where it is needed and enables a more efficient electricity system. Due to delays with the complex construction phase, the joint venture agreed to a £15 million payment into Ofgem’s redress fund (NGET’s share was £10 million) and to return £143 million to consumers in payments through mechanisms outlined in the price control. This has ensured ET did not benefit from the delay. We have delivered £24 million efficiencies with our Evolution programme. Grow our organisational capability The introduction of SmartWires provides greater control and flexibility of the power flow across our transmission boundaries and the installation of Connectnow is the first Digital Transmission Owner portal in the UK, allowing our customers to understand where to connect and to manage their project portfolios. Our Deeside Innovation Centre is now operational and enabling the trialling of innovative energy solutions. This will accelerate the deployment of new technologies to facilitate net zero and reduce the cost of maintaining and managing the network. Empower colleagues for great performance It is over 12 months since any of our 2,500 field and office-based employees suffered an LTI. However, we are disappointed that the frequency of LTIs amongst our contractors has increased above our 0.1 target following 18 contractor LTIs in the year. We are actively working with our contractors to eliminate this gap by ensuring requirements are clear and consistent across all parties. We are digitalising our operations in order to better enable our people; for example, our Agile Field Force programme has freed up 20,000 hours of engineer time every year. This enables engineers to focus on using their core skills to maintain and install new assets. Looking ahead In order to migrate to a cleaner energy system, we need to connect increasing amounts of renewable energy from the North Sea and the UK’s East Coast. The complexity and scale of the infrastructure investments associated with our East Coast programme will require us to make a step change in how we work with developers, suppliers, environmental groups and local communities so we can find the best local and environmental solutions possible. We will reform the customer connections process to be more efficient, connecting our customers more quickly and making full use of the data and products available to drive transparency. We will release capacity for our teams through reduced admin time, using standardisation and by enabling customers to self-serve to ensure all our work adds value. Highlights ET has performed strongly over 2021/22, increasing annual investment by 20% as part of our £8 billion RIIO-T2 promise. We have maintained our focus on safety, customers, reliability and innovation to continue driving forward the net zero agenda. We submitted a technical appeal to the CMA regarding the RIIO-T2 cost of equity and outperformance wedge. The CMA found in our favour on the outperformance wedge, which has since been dropped from the RIIO-T2 regulatory framework. We have installed 53 T-pylons as part of the route connecting Hinkley Point C nuclear power station to over 6 million homes and businesses. We have completed almost 6.2 miles (10 kilometres) of underground tunnelling as part of our London Power Tunnels (LPT2) project and met 100% of our milestones. Enable the energy transition for all We outperformed this year’s proportion of our SF6 Science Based Targets to reduce emissions by 50% by 2030 through a programme of targeted repair, refurbishment and asset replacement. We have been collaborating with suppliers, universities and innovators across the world to trial SF6-free assets. We have switched 10% of our operational fleet to electric as part of the process of going fully electric by 2030. We connected over 5 GW of generation to the network as part of our commitment to connect over 15 GW of customer capacity over RIIO-T2 to provide the UK with clean power and flexible storage. Despite a quadrupling of new connection requests, our teams achieved a Quality of Connection (customer satisfaction) score of 7.8 in 2021/22. Deliver for our customers efficiently Over the year, we have replaced over 900 assets to maintain a safe and reliable network. The network stood up well against the recent storms and although we experienced multiple circuit trips, the majority were returned via the automatic protection Delayed Auto Reclose (DAR) system. No loss of demand occurred through any of the storms, with only 27 MW of Energy Not Supplied against our incentive target of 103 MW. The first of 53 T-pylons, erected in September 2021 as part of the Hinkley Connection project in the UK 50 National Grid plc Annual Report and Accounts 2021/22 Our business units 12_Our_business_units_UK_p50_52_v64.indd 50 27/05/2022 16:50

UK Electricity Distribution We have performed well in 2021/22 as we maintained excellent customer service and delivery of our innovative projects. Highlights WPD has delivered excellent service for our 8 million customers and remains on track to outperform the majority of our RIIO-ED1 targets. We have continued to outperform our targets for customer minutes lost and customer interruptions by 30% and 27% respectively from the underlying performance benchmark, accident rates have reduced to 0.62 accidents per 100 staff, and our Scope 1 and 2 emissions (excluding losses) have continued to get smaller with a 52% reduction since 2014/15. We have also supported almost 26,000 fuel poor customers, leading to estimated annual savings of £14.6 million for these customers. Our hard work in conducting our business with the highest standards is reflected in WPD winning the Disruptor Award at the Utility Week Awards for our Flexible Power initiative. Enable the energy transition for all We have several innovative delivery projects underway to drive a fair energy transition for all. In RIIO-ED2, we will build on these foundations to ensure customers are able to connect low-carbon technologies (LCTs) quickly and easily. We have centralised our process for domestic LCTs, offering a next day approval for most EVs and heat pumps. Our RIIO-ED2 Business Plan includes core commitments which are targets to ensuring that vulnerable customers do not miss the benefits associated with the shift to a smart energy system. This includes offering 600,000 Priority Service Register (PSR) customers a bespoke smart energy action plan, supporting local communities via a Community Matters social initiative and installing solar PV on schools in areas of high economic deprivation. In May 2022, Ofgem announced that WPD had agreed to pay £3.7 million for each of the four licences we operate, totalling £14.9 million. This followed the outcome of an investigation into the level of information, advice and services provided to customers on the PSR. We have made changes to our policies and processes to ensure we are fully complying with the expectations Ofgem has clarified in our licence. Deliver for our customers efficiently Even though we had to change some practices due to the COVID-19 pandemic, we have continued to provide the highest level of service to our 8 million customers. Our hard work is reflected in our excellent performance against the Broad Measure of Customer Satisfaction (BMCS) results, scoring 9.03 out of 10 overall. Grow our organisational capability We have established plans and work programmes to build a ‘green recovery’ from the effects of the COVID-19 pandemic. The nationwide call for evidence to support network investment projects saw WPD receive feedback from more than 200 stakeholders, and this helped us target the network investment to the areas that see the most benefit. All 73 projects have been given the go-ahead, each meeting the Ofgem-backed initiative’s criteria of enabling net zero and providing a wider social benefit. The successful projects, which will be completed in the next two years, range from installing new substations to reinforcing existing parts of the network. In total, 55% of the projects relate to customers wanting to connect public EV charging hubs in some form and we estimate that customers could connect up to 50% more ultra-rapid EV chargers because of these investments, many at motorway service areas. Empower colleagues for great performance During the year, the WPD Chief Executive met up with small groups of colleagues to hear their views on WPD. The sessions were attended by colleagues across various roles and encouraged suggestions to be brought forward to drive an overall performance improvement within the organisation. This direct feedback from colleagues will be crucial in producing ideas, innovations and solutions to the many challenges and opportunities that we will have in the business going forward. Looking ahead We are determined to achieve a sustainable energy future by delivering a dynamic, innovative and high-functioning energy grid that stands ready to serve many generations to come. Change is already well underway, with unprecedented levels of flexibility and efficiency, and new distribution system operator capabilities already in place. In RIIO-ED2, we will accelerate the rate of this change, placing customers at the heart of a swift and effective transition to a smart, decarbonised energy future. We will utilise innovative and digitalised solutions to enhance our operations. We will instil a culture across our business that maximises every opportunity to innovate and work smarter for our customers. We have embedded £723 million of efficiency savings into our RIIO-ED2 Business Plan thanks to our proven track record of innovation development and roll-out. Without this, required investment in RIIO-ED2 would have been £7.4 billion, which would have resulted in increases to customer bills. Instead, by working smarter and embracing a culture of continual innovation, we will deliver our RIIO-ED2 commitments with a budget of £6.7 billion whilst maintaining affordability for our customers. In addition, we will deliver an extra £95 million of efficiency savings over RIIO-ED2. We anticipate a 108% increase in the level of load-related schemes, with only an 8% increase in engineering management and support costs. By adopting a ‘flexibility first’ approach to all load-related investment decisions, we have committed that by 2028 we will avoid over £94 million of network reinforcement costs by operating the existing primary and secondary networks more flexibly. Works to improve the overhead network in Droitwich, North Worcestershire, UK 51 S trateg ic R ep o rt National Grid plc Annual Report and Accounts 2021/22 12_Our_business_units_UK_p50_52_v64.indd 51 27/05/2022 16:51

Our business units continued UK Gas Transmission* UK Electricity System Operator We have commenced RIIO-T2 strongly and made good progress preparing for the sale of a majority stake in the Gas Transmission business. We are working with stakeholders to support progress towards net zero while maintaining energy security and minimising costs for consumers. Highlights The RIIO-T2 price control will provide a high degree of cash flow certainty for the GT business for the five-year period to March 2026. Detailed plans are in place to deliver against our targets, through continued strong incentive performance, as well as preparing for the energy transition. GT made a strong start to RIIO-T2, with strong financial results, customer metrics, and continued high levels of safety and operational performance. We continued to support our colleagues through the COVID-19 pandemic, ensuring alignment to government guidelines at all times. GT continues to work with industry peers to support the transition to a hydrogen network and has now commenced construction of FutureGrid – a £9 million full-scale hydrogen test facility, funded through the Network Innovation Competition. Looking ahead Following the announcement on 18 March 2021 of the intention to sell a majority stake in the GT business, preparations have been ongoing throughout the year for the design of a standalone business. The sale of a 60% equity interest in the GT business to a consortium of Macquarie Asset Management and British Columbia Investment Management Corporation was announced on 27 March 2022. The results of GT are presented as discontinued operations in 2021/22. We are committed to supporting our people through the remaining stages of the sales process, providing access to all necessary information as well as increased engagement across the business. We are working closely with BEIS, Ofgem and all other industry stakeholders to provide assurance of our unrelenting focus on delivery of RIIO-T2 performance and ensuring security of supply throughout the transitional period and beyond. Highlights As Great Britain’s electricity system operator, we are at the heart of the energy transition, operating one of the safest, most reliable and fastest decarbonising networks in the world. The ESO launched its Future Energy Scenarios in July 2021, which outlines four different, credible pathways for the future of energy between now and 2050. Bacton Gas Terminal, Norfolk, UK ESO Control Centre, UK * Discontinued operation. Looking ahead In April 2022, BEIS and Ofgem announced their decision to establish an expert, impartial Future System Operator to drive progress towards net zero while maintaining energy security and minimising costs for consumers, which will incorporate and build upon the existing capabilities of the ESO. We will continue to work closely with government, the regulator and industry as we enter the transition period, which will require communication and engagement with our impacted colleagues, who are an essential part of this new organisation, and a complex separation activity, particularly of IT systems. 52 National Grid plc Annual Report and Accounts 2021/22 12_Our_business_units_UK_p50_52_v64.indd 52 27/05/2022 16:51

affordability and equity, safety, reliability, and resilience. Our plan strives to retain customer choice around heating solutions, reduce overall energy costs, increase investment and adoption of energy-efficiency measures, and make provisions for utilising non-pipe alternatives where safe and cost effective. Deliver for our customers efficiently We aim to provide a fairer, cleaner and more affordable gas service to our customers. The Department of Public Utilities approved our five-year rate plan on 1 October 2021. The plan supports capital investment and provides resources to meet our work plans over the next five years. We also received approval of our geothermal demonstration programme, which secured funding for four district geothermal system installations for existing Massachusetts gas customers. Grow our organisational capability In July 2021, the Company’s Massachusetts Phase 3 Electric Vehicle proposal was filed with the DPU to build upon our first two Electric Vehicle Market Development Programs by providing offerings to meet the diverse transportation needs of all the Company’s customers, building the infrastructure required to support state-wide EV adoption, and helping to enable the Commonwealth’s broader transition to a clean transportation future. The Company is proposing to run the Phase III Program for a period of four years, with a total budget of approximately $278 million. In October 2021, we appointed a New England President to our Group Executive Committee. The Committee’s wide range of experience will help lead the clean energy transition for all of our communities. The sale of our Rhode Island electricity and gas business will serve as a vital step in furthering our strategic vision. To prepare for the sale, we established a transition team of over 250 people across 19 functional areas to set up both the future Massachusetts and Rhode Island businesses for success. The sale has received all required regulatory approvals, including from the Rhode Island Division of Public Utilities and Carriers. That decision, however, has been appealed to the RI Superior Court by the RI Attorney General. We are confident that the Division’s approval of the sale will be upheld and look forward to closing the transaction as expeditiously as possible. Empower colleagues for great performance Our colleagues worked to create an equitable impact in our communities. The New England Gas Diversity, Equality and Inclusion Council is a grassroots group of both union and management field employees. The group recently launched two initiatives to recruit and retain employees from diverse backgrounds, including hosting a pipeline career development day at local high schools. By investing in our communities through education and upskilling talent to adapt to the changing energy system, we are tackling our DEI commitments. Looking ahead Customers are always at the forefront of everything we do, and we must consistently deliver a safe and reliable service. The various organisational changes in our region will allow us to provide a better service to our customers. This is the foundation for us to continue to be greener, stronger and more reliable. New England In 2021/22, we performed well throughout the region while still dealing with the effects of the COVID-19 pandemic, severe weather events and significant organisational changes. There was a continued focus on safety, storm response and the clean energy transition. Highlights We used lessons learnt throughout the pandemic to help navigate the ever-changing COVID-19 protocols in the region. Colleagues continued to work safely, whether in the field or utilising our hybrid or remote work model. In addition, we found ways to give back and support the communities we serve by assisting with COVID-19 vaccinations and donating hygienic safety products to non- profit organisations. New England faced several challenging storms this fiscal year. Our field crews and emergency response organisation conducted thorough emergency planning and collaborations across divisions, which resulted in our crews safely and efficiently restoring power to our customers. Our restoration efforts were recognised once again as we were awarded EEI Emergency Response Awards for both Tropical Storm Henri and the October Nor’easter. Safety is a pillar of our daily operations, and we continue to focus on the wellbeing and safety of our workforce and customers alike. We have improved our safety score for near misses and good catches and, as at 31 March 2022, our LTIFR was 0.18. Enable the energy transition for all In 2021, we worked with the City of Melrose to deploy 15 pole-mounted EV chargers to expand EV adoption, accelerate usage and lower installation costs. This project is the first deployment of elevated, pole-mounted EV chargers by an investor-owned utility in the US. We have focused on advancing clean transportation by working with cities such as Beverly on an electric school bus project, incorporating a fully electric-powered backhoe into our fleet, and proposing our largest ever EV programme with Massachusetts regulators. The Company also continued to reduce methane emissions from our gas network. We replaced over 170 miles (274 kilometres) of leak-prone gas pipes across New England, improving pipeline safety and reducing greenhouse gas emissions. In March 2022, as part of the DPU 20-80 proceeding, we and our fellow Massachusetts gas utilities filed a plan with the Department of Public Utilities that outlines exactly how to get to a decarbonised heating future. We believe our approach will most effectively balance Boston Common Park, Massachusetts, US 53 S trateg ic R ep o rt National Grid plc Annual Report and Accounts 2021/22 Our business units continued

New York In 2021/22, we achieved overall strong results throughout the region. Throughout the various organisational model changes, severe weather events, rate cases and public opposition in our region, we prioritised safety, bold clean energy and climate action plans, and our commitment to the communities we serve. Deliver for our customers efficiently In New York, we are serving our customers and communities through our new initiative, Project C. Project C focuses on four key priorities: clean energy and sustainability; workforce development; neighbourhood investment and community engagement; and environmental justice and social equity. By providing grants to non-profits, recreational programmes, and local economic development partners, we will support the revitalisation of communities and small businesses across our service area. With the cost of heating increasing this past winter, we collaborated with AARP New York and the Public Utility Law Project (PULP) to make income-eligible customers aware of our Energy Affordability Programme (EAP). Our Consumer Advocates helped seniors with enrolment in EAP and provided information on other no-cost, energy-saving programmes to improve the comfort of their homes. Grow our organisational capability We play a key role in combatting climate change and providing climate solutions. As part of the lead-up to COP26, we joined forces with government leaders from around the world at Climate Week NYC, where we were the headline partner, to focus on fulfilling and increasing commitments to climate action. Several National Grid leaders contributed to the global conversation on climate change and how to take action. Another significant highlight in our region was bringing 900 of our Long Island gas field employees through a gas business enablement go-live. We successfully provided colleagues with tools and applications to meet the needs of our customers, communities and regulators. Empower colleagues for great performance After nearly three years of planning, our new Brooklyn, New York office at 2 Hanson Place opened in 2021. This highly anticipated space was built on the Smart workspace strategy, and we ensured it incorporated principles of sustainability and human wellbeing in its design and operations. The building was also designed to WELL and Leadership in Energy and Environmental Design building standards, which resulted in an Award of Excellence by the New England chapter of CoreNet Global. Looking ahead The New York team had a good year, and we are excited about what is ahead. We will continue to make strategic investments in our network, invest in our communities through Project C, and create a stronger, more diverse workforce for the future. Highlights New York encountered several challenging storms, but we remained focused on emergency planning and restoration efforts. This year we received an EEI Emergency Response Award and the 2021 ReliabilityOne® Award for Outstanding Suburban and Rural Service Area Utility in the Northeast as we hit our regulated reliability goals for the 14th consecutive year. Safety remained one of our top priorities in the region. We continued to use the tools and processes developed at the onset of the pandemic to safely navigate through the various spikes in COVID-19. We have improved our safety score for near misses and good catches, and as at 31 March 2022, our LTIFR was 0.13. Enable the energy transition for all In New York, we are doing our part to fulfil the clean energy transition. In 2021, we worked with the town of Hempstead, New York, and introduced one of the country’s first and largest clean hydrogen demonstration projects. The HyGrid Project located in Point Lookout on Long Island will blend green hydrogen into the existing distribution system to heat approximately 800 homes and fuel a fleet of municipal vehicles. We are also working with the New York Power Authority to build the Smart Path Connect project, a $1 billion transmission upgrade that will enable the integration of 1 GW of renewable energy to the grid. In addition, we have proposed nearly $700 million in short-term transmission upgrades in upstate New York that would unlock roughly 2.6 GW of clean energy resources. The solid rate case agreements that have been completed for KEDNY, KEDLI and NMPC are essential steps in energy transition. These rate agreements will provide us with the funding needed to create the energy infrastructure and service our New York customers demand and deserve. View of Albany, New York, US 54 National Grid plc Annual Report and Accounts 2021/22 Our business units continued 13_Our_business_units_US_p53_54_v50.indd 54 27/05/2022 16:53

National Grid Ventures and Other activities Highlights This section relates to NGV, non-regulated businesses and other commercial operations not included within the business segments. NGV, which operates separately from our core regulated units, is focused on competitive markets across the UK and US. Its portfolio includes electricity interconnectors, LNG storage and regasification, large-scale renewable generation, conventional generation and competitive transmission. Other activities primarily relate to NGP, the corporate investment and innovation arm of National Grid, as well as UK property, insurance and corporate activities. Despite ongoing challenges presented by the COVID-19 pandemic in the US and UK, NGV businesses performed well in 2021/22, including commissioning the North Sea Link interconnector between the UK and Norway and the Prairie Wolf Solar Project in Illinois. NGV also successfully secured a seabed lease in the New York Bight offshore auction together with RWE Renewables. In March 2022, National Grid Property completed the sale of National Grid’s 50% interest in the St William Homes LLP joint venture to The Berkeley Group plc. The safety and wellbeing of colleagues continues to be a key priority across NGV. As at 31 March 2022, NGV’s LTIFR was 0.14. Enable the energy transition for all NGV plays an important role for the National Grid Group in developing, constructing, operating and investing in infrastructure to support the energy transition and security of supply in both the UK and the US. In the UK, NGV is the leading developer and operator of interconnectors, which are high- voltage subsea cables that enable the UK to share excess power, such as wind, solar and hydro generation, with neighbouring markets. In October 2021, NGV commissioned North Sea Link, which at 447 miles (720 kilometres) is the world’s longest subsea interconnector. NGV also operates links to Belgium, France and the Netherlands. By 2030, we estimate that 90% of the energy imported by NGV interconnectors will be from zero-carbon energy sources. NGV is part of the Northern Endurance Partnership, a consortium developing CO2 transport and storage technology for the East Coast Cluster (ECC) in the North of England. The ECC, which aims to transport carbon emissions from the Humber and Teesside for safe storage deep under the Southern North Sea, is one of two industrial clusters selected by the UK government to be delivered this decade. Ofgem has agreed to National Grid’s offer to make an early payment of £200 million of interconnector revenues to consumers, via the regulator, as part of the interconnector regulatory regime. The payments will be made over the next two years, to help reduce consumer energy bills. In the US, NGV and RWE Renewables successfully secured a seabed lease as part of the US Bureau of Ocean Energy Management’s New York Bight auction. Community Offshore Wind, a joint venture between the two companies, will develop the awarded seabed, which has the potential to host 3 GW of capacity. NGV’s National Grid Renewables business started commercial operations of its 200 MW Prairie Wolf Solar Project in Illinois and began construction on 674 MW of solar and energy storage projects in Texas and Ohio. NGV is part owner of New York Transco, which started construction of the largest transmission project in New York in 40 years to enable 1 GW of renewable energy onto the system. NGP had a portfolio which comprised 38 companies and four fund investments at a fair value of $491 million, as at 31 March 2022. Deliver for our customers efficiently In the UK, NGV’s interconnector portfolio comprises 6.4 GW of operational capacity. Together with France’s Réseau de Transport d’Électricité (RTE), NGV operates the IFA and IFA2 interconnectors connecting France and Great Britain. IFA, a 2 GW HVDC cable, suffered a major fire in September 2021. Half of the link, representing 1 GW, was safely returned to service the following month. The remaining 1 GW is expected to return to service in December 2022. IFA2 is a 1 GW cable stretching 149 miles (240 kilometres). BritNed is an independent joint venture between National Grid and TenneT, the Dutch transmission system operator. It owns and operates a 1 GW HVDC link between Great Britain and the Netherlands. Nemo Link is an independent joint venture between National Grid and Elia, the Belgian transmission system operator. It owns and operates a 1 GW HVDC link between Great Britain and Belgium. NGV’s Grain LNG is one of three LNG importation facilities in the UK. It operates under long-term take or pay contracts with customers and provides importation services of ship berthing, temporary storage, ship reloading and regasification into the National Transmission System (NTS). Grain LNG’s road tanker loading facility also offers the UK’s transport and off-grid industrial sector a more environmentally friendly alternative to diesel or heavy fuel oil. The facility allows tanker operators to load and transport LNG in bulk across the UK via road or rail. NGV is a part owner of Millennium Pipeline, which provides consumers in the northeastern US with additional natural gas infrastructure to meet growing consumer demand for cleaner and more reliable energy. It is strategically positioned to serve utility and power plant loads across New York State and into New England. Grow our organisational capability NGV established a portfolio management function to optimise the existing portfolio and identify future opportunities for growth. Empower colleagues for great performance NGV prides itself on a diverse and inclusive culture, which includes 46% diversity across new hires in 2021/22. Looking ahead In the UK, NGV will grow its interconnector portfolio by 1.4 GW in the next two years, with construction underway on the Viking Link interconnector. Developed together with Danish transmission system operator Energinet, Viking Link will be a 475 mile (765 kilometre) long subsea link connecting Great Britain and Denmark. NGV will have 7.8 GW of operational interconnector capacity when Viking Link becomes operational in 2023/24. Work is also underway to expand Grain LNG’s storage capacity from 1.0 million m³ to 1.2 million m³ by 2025, further supporting the UK’s gas security of supply. Inside the UK valve hall at NGV’s 1GW IFA2 interconnector 55 S trateg ic R ep o rt National Grid plc Annual Report and Accounts 2021/22 14_Our_business_units_NGV_and_other_activities_p55_v46.indd 55 27/05/2022 16:54

Effective engagement with our stakeholders is key to successful achievement of the Group’s strategy in the long term. Section 172(1) statement During the year, the Directors acted in the way they considered, in good faith, most likely to promote the long-term success of the Company for the benefit of its members as a whole, with due regard to the matters set out in section 172 of the Companies Act 2006. Examples of how the Directors have had regard to these matters during the year are set out on pages 56 – 59, which together form our section 172(1) statement. The Board recognises its responsibilities to each of National Grid’s stakeholder groups and to wider society. The Directors endeavour to ascertain the interests and views of our stakeholders and consider these when taking decisions. The Board oversees a governance framework that enables decisions to be taken at the right time in the most appropriate forum. We recognise that it is not always possible to achieve each stakeholder’s preferred outcome and consideration of each stakeholder group depends on the matter at hand. The Board strives to balance the different priorities and interests of our stakeholders in a way compatible with the long-term, sustainable success of the business and which maintains a standard of business conduct aligned to our values and purpose. An overview of business-level engagement and outcomes is reported to the Board or appropriate Board Committee on a regular basis. The cadence and content of such reports to the Board are considered bi-annually as part of the forward business review by the Chair, Chief Executive and Group General Counsel & Company Secretary, to ensure sufficient consideration is given to pertinent matters and affected stakeholders. One of the Board’s objectives is to routinely bring external viewpoints into Board discussions, which have included external speakers, training sessions and organisational deep dives led by colleagues from across the business, during the year. The Board has identified the stakeholder groups it considers key and some examples of how we have engaged with these groups, together with the outcomes and impacts of engagement on our business and Board decisions, are set out on pages 57 – 58. These examples are not exhaustive and we have integrated reporting on how stakeholder views are considered throughout this report. The following should therefore be read in conjunction with this statement: • Pages 92 – 94 set out key matters considered by the Board during the year. • Pages 4 – 7 describe our business model including how our business interacts with our key stakeholders, and why they are important to us. • Pages 60 – 69 set out our commitment to being a responsible business and the action we have taken during the year. • Pages 15 – 19 explain developments in our business environment and our responses. • Pages 101 – 103 explain the activities of the Audit & Risk Committee in response to allegations of fraud and bribery offences by former National Grid employees in our US business. Our approach to stakeholder engagement Most engagement with key stakeholders is carried out by management teams and takes place at business level and the Directors engage directly with stakeholders where possible. Reporting mechanisms are in place to collate feedback and developments from such engagement and enable a flow of this information to the Board and Board Committees, to inform decision making. Financing, stewardship, constructive engagement Investment, partnership relationships Expertise, talent, living our values Expertise, talent, living our values Partnership and commitment, industry viewpoints Expecta ion setting, insight Expert industry views and insight Long-term growth prospects, heart of the energy transition Long term growth prospects, heart of the energy transition Long term growth prospects, heart of the energy transition Quality products and services Value-led culture, purposeful work, development Public policy, engagement, insights and feedback Safe, reliable service deliv ry Regulatory frameworks, collaboration Our investors Our regulators Communities and governments Contractors and suppliers Our colleagues Our customers National Grid 56 National Grid plc Annual Report and Accounts 2021/22 Stakeholder engagement Our stakeholders 15_Our_stakeholders_s172_p56_59_v62.indd 56 27/05/2022 16:55

How we engaged In November 2021 we held our ‘Doing Right Now’ Investor Day, attended by the Chief Executive and senior leaders, where we announced our new organisational structure and associated cost-efficiency target, and further clarified our five-year plan announced in May 2021. The Chief Executive attended the UK Global Investment Summit in October 2021, which focused on opportunities for investors and businesses as part of the UK’s Green Economic Recovery. Our Remuneration Committee engaged with shareholders on key remuneration topics, particularly development of the new remuneration policy, which will be put to a shareholder vote at our 2022 AGM. Outcomes and actions An independent investor-perception study following the Investor Day found the Company’s critical role at the heart of the energy transition was well understood and there was a high degree of trust that the Company will fulfil this role successfully. The need to maintain the momentum to integrate our ESG reporting and talk more about future opportunities for the network, particularly in the US, was highlighted. Responses have informed our ongoing investor relations communication strategy and we will address key themes at investor events throughout 2022. At the 2021 AGM, the Board proposed, and shareholders approved, an amendment to Company’s Articles of Association to enable the holding of hybrid AGMs. This flexibility will enable more of our shareholders to participate in future AGMs, using online facilities. We intend to hold a hybrid AGM for the first time in 2022. Our unique investment proposition is set out on pages 8 – 9. Engagement with our stakeholders Stakeholder group – Our investors How we engaged As COVID-19 restrictions in the UK eased, the Board was able to safely participate in site visits in early 2022. Following extensive oversight by the Board of the investigation into a catastrophic fire at the IFA interconnector site in Sellindge during 2021, three Non-executive Directors visited the site in March 2022. They met with a range of workers on site and heard views on safety practices. The annual Grid:voice engagement survey provides insights into what is important to our colleagues and how they are feeling about the Company’s strategy and leadership. The results of this survey were provided to the Board and plans put in place to progress any areas of improvement identified. Further information about the Board’s employee engagement programme is set out on pages 96 – 97. Outcomes and actions Feedback from our annual Grid:voice survey has led to development of our home-working IT capabilities and of our flexible working policy, following a strong indication of a preference among the workforce to continue with hybrid ways of working. Specific indicators are used as a measure of culture in relation to employee perception of safety and leadership. You can learn about how the Board oversees corporate culture and the progress we are making on these indices on page 95. Employee engagement and workforce diversity are two of our non-financial KPIs. Further information is on page 27. Read about our commitments to our colleagues and how we are living our corporate values on pages 65 – 66. Stakeholder group – Our colleagues How we engaged Bi-annual updates are provided to the Board on UK, US and NGV customers, including progress on deliverables linked to our strategic priorities. As recommended by the NY Monitor, the Company produced a supplementary report to its Natural Gas Long-Term Capacity Report for Brooklyn, Queens, Staten Island and Long Island (published in 2020), which analysed gas supply constraints in downstate NY and identified options for meeting future demand. The supplementary report was based on the results of an extensive outreach programme to measure customer and other stakeholder support for the various supply options for future demand. Engagement occurred through multiple channels, including social media and web platforms. Regular reports and analysis were provided to the Board to inform strategy development in this area. WPD has an established customer panel that meets quarterly, with members who represent a wide range of customers and other key stakeholder groups. This enduring, expert engagement plays an important role in challenging our approaches, helping WPD achieve its purpose of delivering good value and high-quality services for its customers. Outcomes and actions The Board spent considerable time discussing the customer viewpoints presented as part of the downstate New York supply analysis together with the report’s findings and consideration of the robustness of the report’s methodology. The Board noted the impact of adverse weather conditions on customers across the network during 2021 and early 2022. Several storms in the UK and the US caused power outages in a number of areas. The Company was able to provide a strong operational response to Storm Henri in New England, due largely to the Company’s investment in Rhode Island infrastructure over the past five years. You can read more about our storm response on page 19, in our business unit updates on pages 50 – 55, and in our Safety & Sustainability Committee report on page 106. To address the challenges of engaging with end customers, who often have little prior knowledge of WPD, an enduring cohort of 96 customers have undergone a programme of research and focus groups over several months, enriching their understanding and ability to offer informed scrutiny of our plans. Stakeholder group – Our customers 57 S trateg ic R ep o rt National Grid plc Annual Report and Accounts 2021/22 15_Our_stakeholders_s172_p56_59_v62.indd 57 27/05/2022 16:55

How we engaged Regular reports relating to interactions with our suppliers were provided to the Group Executive Committee and to the Board. Additional information about specific challenges as they arise, such as those presented by the heightened energy prices in the UK and the related security of supply are included in management reports to the Board to inform discussions. In January 2022, the Safety & Sustainability Committee welcomed external speakers from Quanta Services Inc., a major supplier of infrastructure services to the Group in the US. The Board receives an annual update on the approach taken to address modern slavery risks across our supply chain and the proposed commitments for the following year. Outcomes and actions We strive to work only with businesses that adhere to our Code of Conduct and continue to work closely with our suppliers and peers to share and build upon existing knowledge and promote best practices within the industry. We have worked with Ofgem via the ENA with WPD participation in working groups to facilitate the recovery of Supplier of Last Resort (SoLR) costs for suppliers. In response to developments in the UK gas and energy markets, we established an organisation-level Energy Market Risk Committee to monitor and consolidate the risks and impacts of the current market for reporting to the Board. The Board considers and approves the Company’s Modern Slavery Statement annually. This statement is available at nationalgrid.com/modern-slavery-statement. Stakeholder group – Suppliers and contractors How we engaged We were a principal partner at COP26 in 2021. The Company hosted a number of sessions and events, including the Chief Executive co-hosting the launch of the Green Grids Initiative with the UK government. One of the Board’s aims is to provide positive advocacy for key public policy and regulatory changes in support of net zero. The Chief Executive and other members of senior leadership have met directly with members of the UK and US governments during the year as part of the Company’s ESG outreach to highlight our continuing efforts towards a clean energy transition. In response to the situation in Ukraine, the business has established a Crisis Assessment Team to assess the situation on an ongoing basis and additional Board reporting has been implemented to ensure prompt information flows. The Board advises as to actions that may be undertaken quickly, where appropriate. Outcomes and actions As part of enabling the energy transition for all, the US business established independent New York and New England Advisory Boards to provide objective input and external expertise to US senior leaders. The boards will enable the Company to build on existing relationships while creating new relationships, and advance the Company’s profile as a socially responsible and purpose-led organisation among our stakeholders in the US. The Company was invited and agreed to participate in the Green Grids Initiative’s UK secretariat after COP26. Further information on this and our other COP26 activities is on pages 16, 17 and 69. WPD was the first DNO to develop a Social Contract as a vehicle for delivering social and environmental value for our employees, customers and wider society. Co-created with stakeholders, the Social Contract sets out our ambitions to maximise the positive impact of what we do. Read about our community programmes on page 62. Stakeholder group – Communities, governments and environment How we engaged The Board receives regular updates from the business on regulatory matters. The NY Monitor attended the Company’s Board meeting in June 2021 to engage in discussion with the Directors about the Company’s supplementary report to its Natural Gas Long-Term Capacity Report for Brooklyn, Queens, Staten Island and Long Island (published in 2020). The session covered the culture of the Company’s US business, issues of supply and demand in New York and the need for third-party and regulatory support for innovative change. There was a second meeting with the NY Monitor in September 2021, hosted by a subset of the Directors. The Company seeks to maintain a collaborative relationship with all its regulators. The Board met with Ofgem senior leadership in March 2022. Outcomes and actions During the year, US regulatory matters, the RIIO-ED2 regulatory consultation and our engagement with Ofgem have been considered in depth by the Board. The Board discussed the complexity of the downstate New York supply challenges and confirmed that this would continue to form part of the Board’s agenda in 2022. The Board noted the Company’s engagement with Ofgem on changes to SoLR rules which will improve the viability of suppliers to retail customers. As we work to drive progress towards net zero and a secure energy future, the Company has, and will continue to, consult extensively with Ofgem and BEIS on development and implementation of the FSO. Read more about the ESO on page 52. Stakeholder group – Our regulators 58 National Grid plc Annual Report and Accounts 2021/22 Our stakeholders continued 15_Our_stakeholders_s172_p56_59_v62.indd 58 27/05/2022 16:55

Case study: Strategic portfolio repositioning Section 172 considerations: Likely long-term consequences of decisions The decision to undertake a strategic portfolio pivot, and specifically the three transactions announced during the 2021/22 financial year, considers the long-term sustainable growth profile of the Group as key. The transactions are aligned to our wider ambition to be at the heart of the energy transition. The decision to acquire WPD, the UK’s largest electricity distribution business, increases our exposure to electricity, which is expected to see a high level of asset growth as a part of the UK government’s plans to decarbonise the energy system. Interests of our colleagues The Board has considered the impacts of the integration of WPD on existing and incoming employees and of separation on employees of NECO and GT at every stage. This includes the technological and operational aspects of their work environments and continuity of rewards. The Board oversaw an engagement plan for the integration of WPD employees and the Chief Executive toured key WPD sites in September 2021. The CEO of WPD will lead the UK distribution business as part of the enlarged Group. Fostering business relationships with suppliers, customers and others The Company expects to provide benefits for customers and suppliers as a result of greater interconnectivity of the network following the onboarding of WPD. In conjunction with the NGG Sale, the Company engaged in dialogue with BEIS in relation to the newly implemented National Security and Investment Act 2021 in the UK. Impact on community and environment The Company recognises the importance of WPD to the communities it serves and has announced its intention to maintain the WPD headquarters in Bristol and offices in other key locations. WPD’s community programmes have been maintained and are being integrated into the Group’s wider projects. The strategic portfolio repositioning is aligned to the Group’s wider ESG strategy. For more information see page 74. Maintaining a reputation for high standards of business conduct The Board oversees the process for obtaining the appropriate regulatory approvals required for each of the transactions before they are able to complete. Regular updates on progress were provided to the Board. Need to act fairly between members The Company endeavours to provide investors with clear and transparent reporting on its plans and progress. The Investor Day in 2021 was an opportunity for investors to hear about the Group’s five- year plan and to ask questions of a broad group of business leaders. The Company maintains an investment grade credit rating supporting its sustainable dividend policy. In March 2021, we announced our plan to reposition our portfolio through three strategic transactions: the acquisition of WPD, and the sale of NECO and of a majority stake in NGG. The Board has spent a significant amount of time during the year overseeing the progress of these transactions and considering the ongoing implications for our business and stakeholders. A Transaction Steering Committee (chaired by the Chief Executive) and a Transaction Management Office were established to provide executive-level oversight and a layer of governance over the transaction programmes. Regular reports and updates were provided to the Board on progress, including deep dives and the results of ongoing stakeholder engagement to inform decision-making at all stages. Read more about our strategic portfolio positioning in our Chair’s statement and Chief Executive’s review on pages 10 – 14 and our strategy and risk management for climate change on page 74. The Nemo Link Interconnector that runs between Britain and Belgium powers the Richborough and Canterbury, high-voltage overhead line. 59 S trateg ic R ep o rt National Grid plc Annual Report and Accounts 2021/22

Our RBC focuses our actions on where we can create the most positive impact for society. Responsibility at National Grid Our purpose is to Bring Energy to Life and we do this through the delivery of the electricity and gas that powers our customers and communities, safely, reliably, fairly and affordably, and this is the core of our role as a responsible citizen. It is also vital to focus on how we fulfil our purpose, minimising negative impacts and enhancing our overall contribution to society. We published our RBC in October 2020 and the commitments we made then remain the foundation of our activity. The RBC contains a series of commitments under five headings: the environment, our communities, our colleagues, the economy and our governance. These commitments are now built into business plans and performance against each commitment is regularly reviewed. During 2021/22, we received external validation from the SBTI for our National Grid Group interim GHG reduction targets, aligned to a ‘Well below 2°C’ pathway. Alongside this, we have undertaken a programme to release value from unclaimed shares over 12 years old and will explore ways to use this value to enhance our community investment programmes. Our approach to reporting We have published our second separate RBR for 2021/22, which has been guided by internationally recognised reporting standards. The RBR contains information relating to our material focus areas and provides detail on our management approach, performance and the new commitments set out in the RBC. Certain metrics are subject to independent external assurance. Our performance data is subject to different levels of assurance, including external (limited) assurance for key metrics, and a reporting process and controls review by National Grid’s Finance second line risk and controls team. This section of our Annual Report provides a high-level summary of our approach to responsible business and meets regulatory requirements with regard to certain responsible business-related topics. Except where expressly stated or clear from the context, the data in this section does not include WPD data. You can find the RBR and RBC here: nationalgrid.com/responsibility The environment While continuing to manage our environmental performance responsibly, we have emphasised the need to facilitate the transition to a clean energy system, to achieve net zero by 2050 for our Scope 1 and 2 emissions, dramatically reduce our Scope 3 emissions and continue to improve the biodiversity of land that we own. Our governance We will hold ourselves accountable on these commitments and ensure that stakeholder voices continue to be heard at the highest level, and that they influence our approach. We will ensure we maintain the highest standards of ethical conduct. Our people While continuing to ensure our people are kept safe and healthy, and that work conditions meet their expectations, we are stepping up our efforts in relation to diversity and inclusion – focusing on fairness in pay and opportunity, transparency and training around issues of gender and ethnicity. The economy We are continuing to develop our infrastructure, invest in innovation that benefits our customers and wider society, and pay the right tax, as well as working to influence our supply chain to focus on diversity and responsible behaviour. Our communities While continuing to place public safety and network reliability and resilience as top priorities, we are focusing in particular on the affordability and fairness of our service to the community and developing the skills of young people from some of the more deprived communities where we operate to help us in the clean energy transition. Material issues for Global Reporting Initiative (GRI) reporting purposes Our governance • Board representation and role • Stakeholder engagement • Emerging risks • Skills for the future on the Board • Transparency and reporting • Culture • Ethics and human rights • Compliance Our people • Social mobility • Diversity, equity and inclusion • Fair pay • Employee rights • Employee health and safety • Mental health and wellbeing • Purpose, values and culture The economy • Right tax • Fair return • Investment (long-term and local) • Green financing • Supplier prompt payment • Supply chain engagement Our communities • Affordability • Community engagement • Science, technology, engineering and mathematics (STEM) education • Workforce development • Network reliability • Customer satisfaction • Cyber security • Public safety • Connectivity The environment • Enabling a clean energy system • Our own emissions • Air quality • Land use • Water • Circular economy • Habitat and biodiversity • The energy transition 60 National Grid plc Annual Report and Accounts 2021/22 Our commitment to being a responsible business 16_Our_commitment_to_responsible_business_p60_69_v117.indd 60 27/05/2022 16:58

61 S trateg ic R ep o rt National Grid plc Annual Report and Accounts 2021/22 Our approach to managing responsible business matters Our overall approach to responsible business can be summarised as: • identifying our key stakeholders, understanding how they interact with our operations, activities and value chain, and the issues that are relevant to them; • adopting a logical process for prioritising those issues, to identify the most material matters; and • responding to the priorities by developing appropriate strategies, policies, programmes, targets and performance indicators, and reporting regularly and transparently on our progress. In establishing our priorities, we are also guided by recognised frameworks such as the United Nations Global Compact Principles and Sustainable Development Goals. Over the years, we have developed a series of processes and policies to ensure we manage responsibility issues effectively. Descriptions of the policies and the outcomes pursued in relation to the matters listed on page 60 are discussed, where material, throughout this section and our RBR. A full list of our policies, and our Code of Ethics, can be found online, at nationalgrid.com/about-us/corporate-governance. Assurance We engaged PricewaterhouseCoopers LLP (PwC) to undertake a limited assurance engagement for 2021/22 data only, using the International Standard on Assurance Engagements (ISAE) 3000 (Revised): ‘Assurance Engagements Other Than Audits or Reviews of Historical Financial Information’ and ISAE 3410: ‘Assurance Engagements on Greenhouse Gas Statements’. PwC have provided an unqualified opinion in relation to the 2021/22 KPIs and other data that are identified with the symbol and feature on page 1, pages 26 − 27, page 68 and page 83. Details of PwC’s full limited assurance opinion and National Grid’s Reporting Methodology are set out in the RBR. Data that has been assured by PwC is identified with the symbol . Non-financial information This section provides information as required by regulation in relation to: Social matters – pages 15 – 19; and – page 62 Environmental matters – pages 15 – 19; and – pages 67 – 83; Business model – pages 4 – 7 Human rights – page 64 and page 263 Principal risks – pages 28 – 32 Our employees – pages 21 − 22 – page 27 – pages 50 – 55 – pages 65 – 66 – page 95 – 96 KPIs – pages 24 – 27 Anti-corruption and anti-bribery – page 63 – 64 (see also pages 101 – 105) Audit & Risk Committee report (our due diligence) – pages 101 – 105 People & Governance Committee – pages 99 – 100 Our stakeholders – pages 56 – 59 Safety & Sustainability Committee – page 106 In addition, other information describing the business relationships, products and services which are likely to cause adverse impacts in relation to the matters above can be found as follows: 16_Our_commitment_to_responsible_business_p60_69_v117.indd 61 27/05/2022 16:58

We go beyond our role in delivering safe, reliable energy for our communities so that everyone can play a role in an affordable energy transition. Our commitments Progress in 2021/22 Status We will deliver sustainable energy reliably. We’re committed to making sure our systems are resilient and can play a leading role in disaster recovery UK ET – 99.99993% US ET – 99.95894% US ED – 99.93472% Our networks continue to run at a high level of reliability Provide access to skills development for 45,000 people by 2030, particularly lower-income communities 5,233 people (cumulative since 2020/21) 3,972 people 2021/22 only Our skills programmes have continued at a lower level through COVID-19 Deliver energy in a fair and affordable way to the communities we serve We invested £18.3 million during 2021/22 to support communities affected by COVID-19 and recent rises in energy prices We are investing more in community support for COVID-19 and rising energy prices An energy transition for all The technological and environmental benefits of the clean energy transition should benefit everyone, and we will play our role in ensuring that no one is left behind. A fully decarbonised transportation infrastructure, for example, should be accessible by everyone across the communities we serve. Part of this role includes protecting and supporting vulnerable customers. In the US, we do this through low-income programmes and energy-efficiency programmes. In the UK, in 2017, we established a £150 million Warm Homes Fund designed to support local authorities and others in helping approximately 50,000 households suffering from fuel poverty. During 2021/22, this fund has helped the Fuel Bank Foundation to provide crisis support. We are also supporting Citizens Advice in its work to support those struggling with the rising cost of living, including energy bills. In 2020, we also launched the Green Light Signal, a smart light bulb that turns green when electricity in your region is more than 50% low carbon. The bulb and new WhenToPlugIn app are designed to engage customers and communities in the transition to low carbon and build understanding of progress. Benefiting communities We are supporting opportunity and growth in our communities. We launched Grid for Good in 2020 to achieve social mobility for disconnected young people in the communities we serve. This year the programme has supported 3,972 young people, helping to inspire and develop the skills needed for net zero. In the UK, we support communities affected by our infrastructure “ We have released significant new funds into our community investment programme.” projects, where grants are available for local projects that bring social, economic or environmental benefits. In addition, as part of capital delivery projects, we work with third-party organisations to provide community benefits at scale. In the US, we support the National Grid Foundation, a non-profit charitable organisation. The Foundation awards grants to non-profit organisations focused on educational and environmental challenges. The Foundation currently disburses nearly $4 million a year; for 2021, this was $3.77 million. In 2021/22, we launched Project C for our community to promote and develop our community programmes in New York State. Across Massachusetts, New York and Rhode Island, we provided total funding of approximately $12 million a year through centrally-led programmes in support of charitable organisations. During the year, we recorded over 23,416 hours volunteered by our colleagues in support of a variety of causes. As we come out of COVID-19 restrictions, we will need to grow our programmes to meet our 2030 commitment of 500,000 hours. Engaging with our communities We seek regular feedback from our customers and communities and act to improve performance. Our approach has been to go beyond providing the safe, resilient energy systems society expects, and work to ensure our economic and social role has the greatest possible impact. This involves developing infrastructure such as our work in East Anglia and helping consumers use energy more efficiently. Our WhenToPlugIn app in the UK informs consumers when the electricity in their homes is coming from clean and green energy sources. We also partner with charity organisations such as Trussell Trust and Red Cross and encourage employees to volunteer in the community. 1,167 National Grid employees have registered to volunteer their time to support our Grid for Good programme. 62 National Grid plc Annual Report and Accounts 2021/22 Our communities Our commitment to being a responsible business continued 16_Our_commitment_to_responsible_business_p60_69_v117.indd 62 27/05/2022 16:58

Our work to deliver secure, reliable, affordable energy underpins the wider economic success of our customers and their communities, their states and nations we serve. We are investing in innovation and raising Green Finance to help enable the energy transition. Our commitments Progress in 2021/22 Status Maintain reinvestment in our infrastructure and demonstrate the social benefits of our new infrastructure programmes Group – £6.7 billion (continuing operations) In line with our commitment of reinvestment in infrastructure Continue to invest in developing technologies and innovations that benefit our customers and wider society We have developed our Green Financing arrangements and through NGP we have committed £93 million of investment in technology and innovation On track to deliver our investment in developing technologies and innovations Continue to influence our supply chain to operate as responsible businesses CDP A listed for supply chain standards and members of the Race to Zero We continue to develop our supply chain standards and have committed to at least 75% of our top 250 suppliers to have active carbon reduction targets by 2030 We have issued £565 million Green ECAs for our interconnector portfolio to prepare us for a variable renewable energy (VRE) future. More information is available in our first Green Financing Report, now part of our Responsible Business Report. NGP is the venture investment and innovation arm of National Grid, with a portfolio that comprises 38 companies and four fund investments at a fair value of $491 million at the close of the fiscal year. Our approach to tax is part of our commitment to being a responsible business and is guided by our values. We are committed to a coherent and transparent tax strategy and details of this are set out on page 47. Partnership with our supply chain We aim to build partnerships with small and local businesses, and all suppliers who set clear ambitions related to the environment, diversity, economic wellbeing and governance. We are fair to our suppliers and committed to paying them promptly. Across the Group, over 90% of supplier payments were made to contractual terms. We have aligned our Global Supplier Code of Conduct to our RBC pillars and require suppliers to share our commitment to respecting, protecting and promoting human rights. We expect our suppliers to comply with all applicable local, state, federal, national and international laws or regulations, including the UK Bribery Act 2010 and the US Foreign Corrupt Practices Act of 1977. We also require them to adhere to the Principles of the UN Global Compact, the International Labour Organization minimum standards, the Ethical Trading Initiative Base Code and the US Victims of Trafficking and Violence Protection Act of 2000. Through National Grid Partners, in 2021/22, we committed to £93m of investment in technology and innovation Our contribution Our economic contribution to society comes primarily through the delivery of safe and reliable energy but also through our role as an employer, a tax contributor, a business partner and community supporter. We help national and regional governments formulate and manage their energy policies and commitments. Our approach to regulatory consultation is to seek a framework that puts consumers at the centre of our price control, while enabling secure, reliable energy supply and the clean energy transition, each of which are key in protecting future economic growth, safety and wellbeing in society. During the year, we invested £6.7 billion (continuing operations) in our energy infrastructure. This investment allows us to continue to provide secure and reliable supplies and underpin the wider success of the economy. Finance, tax and investment innovation We published our Green Financing Framework in November 2019, and since then have issued bonds from our UK and US electricity businesses, now totalling £1,791 million, funding projects to enable the transition to clean energy. In the UK, we are an accredited Living Wage Foundation Employer and paying a real living wage is a requirement for all our suppliers based in the UK. Expanding the diversity of our supplier base is an important part of our procurement strategy. In the US, we partner in a number of programmes including the Greater Boston Chamber of Commerce Pacesetters Program and the New York & New Jersey Minority Supplier Development Council. We are also partners in the Ascend Long Island project, providing specialised programmes to promote minority business growth and job opportunities. 63 S trateg ic R ep o rt National Grid plc Annual Report and Accounts 2021/22 The economy 16_Our_commitment_to_responsible_business_p60_69_v117.indd 63 27/05/2022 16:58

Our colleagues are vital to our business and we strive to be the employer of choice, attracting a diverse range of highly skilled people who feel they can be themselves at work. Our commitments Progress in 2021/22 Status Be as transparent as possible internally and externally on gender and ethnicity/race We have begun internal reporting on a much wider range of diversity metrics, to underpin our commitment to diversity ON TRACK – Following launch of internal reporting, we expect further granularity of external data over the next 2 years Achieve 50% diversity in our Senior Leadership Group and new talent programmes by 2025 Our Senior Leadership Group diversity is 49.5% and new talent programmes are at 55.6% We have made steady progress on diversity of these key groups and we expect to achieve target ahead of 2025 Grid:voice engagement score 81% (2020/21: 81%) Safe to say ‘yes’ index in Grid:voice 73% (2020/21: 67%) “ Our employee engagement score has stayed consistent.” Leaders who model change • Leaders are responsible for change and encourage colleagues to make decisions and take responsibility. • Measured feedback for all leaders to adjust and align behaviour and increase accountability. • Leaders act safely, inclusively and with integrity. Develop a results-orientated and purpose-driven mindset • Greater accountability. • Improve success for our customers and continue to improve efficiency. • Embrace bold thinking and new ideas. • One team, focused on finding solutions. Our values are at the heart of everything we do • Colleagues are recognised for living our values. • Encourage storytelling of how we are changing; encouraging colleagues to speak up where people are not living our values. • Our values are instilled into our people, processes, policies and ways of working. Our culture Our values Do the right thing Find a better way Make it happen Reflecting the communities we serve Diversity is central to our business at every level of operation and we want our Board and Group Executive Committee to reflect the communities we serve. Our Board diversity is now 53.8% and our Group Executive Committee diversity is 53.8%. We also measure the diversity of our Senior Leadership Group¹, to indicate the diversity of internal progression potential to the executive level. The diversity of this group is 49.5%, which we consider positive for a technical or engineering organisation, but we will not consider ourselves sufficiently diverse as an organisation until we reflect our customers and the communities we serve. 1. Senior Leadership Group: this includes the Group Executive Committee members and the c.110 senior colleagues in the Company. Please note, this differs from the definition of senior management which includes both senior colleagues and subsidiary directors. 65 S trateg ic R ep o rt National Grid plc Annual Report and Accounts 2021/22 Our people 16_Our_commitment_to_responsible_business_p60_69_v117.indd 65 27/05/2022 16:58

Engaging our colleagues We rely on our colleagues to achieve success for the business. We aim to attract and retain the best people by striving to be recognised as an employer of choice that values diversity. We work towards going beyond the main aspects of the employer-employee relationship, to create a culture focused on the value we can add to society. Colleague and contractor safety and wellbeing We have a fundamental duty of care to ensure our colleagues are kept safe at work, and that their health is not affected as a result of their employment. The health, safety and wellbeing of employees and contractors is our primary concern. Any safety incident is one too many, and we work to improve our performance through effective policies, standards, procedures and training. We measure safety performance through a combination of leading and lagging indicators, and LTIFR is one of the core KPIs of the business (see page 27). We take a proactive, risk-based approach to managing health and wellbeing, and have documented standards relating to occupational health and safety, process safety, and wellbeing and health. Incidents are reported to the highest level, and the Safety & Sustainability Committee of the Board undertakes regular deep dives on safety-related topics (see page 106). Living wage and gender pay gap We believe everyone should be appropriately rewarded for their time and effort. In the UK, we are accredited by the Living Wage Foundation, a commitment which extends to our contractors and the work they do on our behalf. We also go above the Living Wage requirements and voluntarily pay our trainees the Living Wage. We undertake a Living Wage review each year to ensure continued alignment and increase individual salaries as required, and also promote the commitment to our suppliers. We review gender and ethnicity pay gaps annually in both the UK and US, and further information is provided in the RBR. Promoting an inclusive and diverse workforce Our policy is that people who identify as having a disability should be given full and fair consideration for all vacancies against the requirements for the role. Where possible, we make reasonable accommodations and provide additional resources for employees who identify as having a disability. We are committed to equal opportunity in recruitment, training, promotion and career development for all colleagues, including those with disabilities. The gender demographic table on the right shows the breakdown in numbers of employees by gender at different levels of the organisation. We have included information relating to subsidiary directors, in accordance with the Companies Act 2006 (Strategic Report and Directors’ Report) Regulations 2013. ‘Senior management’ is defined as those managers who are at the same level, or one level below, the Group Executive Committee. It also includes those who are Directors of subsidiaries, 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. For further, more-detailed information relating to our Gender demographic as at 31 March 2022 Our Board1 Senior management2 Whole Company3 Male 7 110 23,639 Female 6 58 7,117 Total 13 168 30,7564 Male (%) 53.8% 65.5% 76.9% Female (%) 46.2% 34.5% 23.1% 1. ‘Board’ refers to members as defined on the Company website. 2. ‘Senior management’ refers to subsidiary Directors as well as the Senior Leadership Group. 3. In scope are active, permanent employees. Band A-F, Staff, Union, Schemes & Expats, NG Renewables, WPD. 4. Total Company Headcount includes UK GT and metering and varies from RBR due to WPD employees shown separately in RBR but included in Annual Report. approach and performance on gender and ethnic diversity, please see our RBR. We continue to be recognised in awards and benchmarks including being listed Outstanding Employer for Race at the UK Ethnicity Awards, recognised in the top 10 for Company and Diversity Team of the Year at the British Diversity Awards and moved from 480 to 187 in the Financial Times special report on Diversity Leaders. We have close partnerships with external best practice organisations and are active members of sector- and industry-wide groups that ensure we are sharing best practice and campaigning at a sector-wide level for greater inclusion for all. In March 2022, a group of National Grid leaders volunteered at Mudchute Park and Farm, a community charity set in 32 acres of countryside in the Isle of Dogs, London. Mudchute runs a working farm, stables and educational activities – giving under-privileged and under-represented communities in East London the chance to learn and play in a safe, natural setting. It receives a small grant but relies on volunteers and fundraising, so has struggled to cover the costs of animal care and the services it runs during the pandemic. Working in teams and encouraged by TV presenter Tommy Walsh – a keen supporter of the charity – our leaders transformed a wild stretch of ground into an attractive wooded garden in just a few hours. They cleared weeds, built features to attract bees, insects and pondlife, laid paths, erected raised beds, planted flowers and fruit saplings, and repaired and painted a playhouse. Their work leaves a legacy that will make a difference to hundreds of local school children and others in the neighbourhood for years to come. National Grid has committed to continue its support for the charity and provide opportunities for colleagues to return to undertake further work. Case study: Community action in East London Volunteering work at Mudchute Park and Farm, East London, UK 66 National Grid plc Annual Report and Accounts 2021/22 Our commitment to being a responsible business continued 16_Our_commitment_to_responsible_business_p60_69_v117.indd 66 27/05/2022 16:58

We are at the heart of the transition to net zero for our customers and the communities we serve, enabling the renewable and low-carbon energy supply and reducing emissions from our own emissions to net zero by 2050. Our commitments Progress in 2021/22 Status We will reduce Scope 1 and 2 greenhouse gas (GHG) emissions 80% by 2030, 90% by 2040 and net zero by 2050 from a 1990 baseline Connection of renewables and low- carbon supplies continues but for 2021/22 this reduction is outweighed by growth in LIPA emissions ON TRACK – Our long-term plan to reduce emissions despite additional running of generation under contract with LIPA We will reduce Scope 3 GHG emissions by 37.5% by 2034 from a 2019 baseline Recovery of gas demand post-COVID-19 has led to a short-term return of emissions, rising back to historical pre-COVID-19 levels ON TRACK – We are developing a long-term plan to drive down emissions in line with our 2034 targets and we have announced our vision in the US to fully eliminate fossil fuels from both our gas and electric systems by 2050, if not sooner We will reduce SF6 emissions from our operations by 50% by 2030, from a 2019 baseline During 2021/22 we reduced emissions through leakage reduction and announced a further important partnership with Hitachi to deliver a retrofit gas replacement for SF6 ON TRACK – Our work remains in line with our long-term plan to reduce emissions through leakage and then innovate with partners to find a lower emissions alternative We will move to a 100% electric fleet by 2030 for our light-duty vehicles We have joined EV100 to support the wider campaign to electrify, and launched a partnership with Ford for light trucks ON TRACK – New programmes on light trucks and electric-only fleet choices to help achieve this commitment We will reduce energy consumption in our offices by 20% by 2030 72% reduction in energy consumption against our 2020 baseline ON TRACK – We have a number of schemes in the pipeline to make our buildings more efficient We will improve the natural environment by 10% on the land we own by 2030 We have remediated 21.6 hectares of land in 2021/22 ON TRACK – With programmes delivering improvement to the natural environment ahead of 2030 We will achieve zero-carbon emissions from business air travel We have delivered this commitment with a significant reduction in air travel due to COVID-19 and all remaining travel has been offset ACHIEVED – We will continue to restrict air travel to below 50% of pre-2019 levels to maintain our commitments in the RBR Energy consumption Our energy consumption is a key area of focus as this, in turn, affects our carbon emissions. Our energy consumption consists of both fuel consumed and energy purchased from third parties, including renewable energy. Total energy consumption was 3,502 GWh (12,606,859 Gigajoules), an increase of 12% on the previous year. Of this, 99% was from non-renewable sources, with no significant change from the previous year. Total energy consumption in the UK was 2,341 GWh and total energy consumption in the US was 1,161 GWh. Operational energy use was 1,190 GWh (2020/21; 1,748 GWh), our transport energy use was 362 GWh (2020/21; 369 GWh), electricity consumption was 987 GWh (2020/21; 852 GWh) and heating was 163 GWh (2020/21; 156 GWh). Electricity consumption includes the energy consumed in operating the generation assets in the US. Total energy does not include fuels consumed for power generation on behalf of LIPA, the contracting body, amounting to 19,610 GWh (net of energy required to operate the generation assets), a 21% increase on the prior year. Energy consumption related to power generation can vary greatly year-on-year and is determined by LIPA. We therefore report an energy consumption figure net of power generation allowing us to report underlying energy consumption across our business. For transparency, we have reported energy consumption from power generation as a separate line item. Transport covers company car business travel, and our own operational ground and aviation fleet. In addition to energy consumed, we calculate that system losses accounted for a further 11,117 GWh, of which 51% occurred in the US. This was a 0.3% decrease on the previous year. Note: 2020/21 energy consumption has been re-stated to account for a minor misstatement following data reconciliation. 67 S trateg ic R ep o rt National Grid plc Annual Report and Accounts 2021/22 The environment 16_Our_commitment_to_responsible_business_p60_69_v117.indd 67 27/05/2022 16:58

We are working to reduce our business travel emissions by changing to alternative fuel vehicles and reducing business flights. The response required by the COVID-19 pandemic has resulted in more flexible ways of working and has reduced business travel. We will reduce the energy consumed in our buildings and procure green energy where possible. Our Scope 1 emissions were 5.3 mtCO2e, a 12% increase on the prior year (4.7 mtCO2e). Of this, 89% arose in the US and 11% in the UK. The increase resulted mainly from generation emissions exceeding projected levels due to increased LIPA operating hours, required to replace shortfalls in off-island generation and transmission. Scope 2 emissions are reported on a market and location basis: • market based – 2.2 mtCO2e, similar to the prior year • location based – 2.2 mtCO2e, similar to the prior year Approximately 57% of Scope 2 emissions (location basis) were generated in the UK, with the remainder through US operations. Reduction in Scope 2 emissions was mainly due to a reduction in emissions from line losses, resulting from a reduction in grid electricity carbon intensity. We generate GHG emissions across Scope 1 (direct emissions from our operational activities), Scope 2 (indirect emissions from our purchase and use of gas and electricity) and Scope 3 (other indirect emissions from activities and sources outside of our ownership or control). Our RBC sets out a number of ambitious climate-related commitments, the most significant of which is to achieve net zero by 2050. Through this commitment we will reduce Scope 1 and 2 emissions by 80% by 2030, 90% by 2040, and net zero by 2050, from a 1990 baseline. At the end of 2021/22, we have achieved a 65% reduction. Our Scope 3 target covers emissions across our entire value chain with a commitment to reduce the carbon emissions by 37.5% by financial year 2034 (from a financial year 2019 baseline). Our interim Scope 1, 2 and 3 emission reduction targets are validated by the SBTi, demonstrating a clear, credible commitment to achieve our longer-term net zero strategy in line with a well below 2°C pathway. Other commitments, including those relating to reductions in SF6 emissions and increasing the proportion of EVs in our own fleet, are set out in the RBC. We will publish our Climate Transition Plan in June 2022 as part of the RBR. Our total Scope 3 emissions are calculated as 30.1 mtCO2e for the year, an increase of 4% on the prior year. We measure and report in accordance with the World Resources Institute and World Business Council for Sustainable Development Greenhouse Gas Protocol. 100% of our Scope 1, 2 and 3 emissions are independently assured against ISAE 3410 Assurance Engagements on Greenhouse Gas Statements, using an ‘Operational Control’ approach to determine our GHG emissions organisational boundary. The sources of Scope 1, 2 and 3 emissions are detailed in the RBR. We have also published a document, ‘Our Reporting Methodology’, which details the methodologies and protocols used for calculating key responsible business metrics. Further reading page 26 68 National Grid plc Annual Report and Accounts 2021/22 Climate change Streamlined Energy and Carbon Reporting (SECR) mtCO2e 2021/22 2020/21 Scope 1 (direct emissions) 5.3 4.7 Scope 2 (direct emissions) Market based 2.2 2.3 Location based 2.2 2.2 Total Scope 3 emissions 30.1 28.9 US Cat 3 (fuel and energy related activities) 4.3 4.1 US Cat 11 (use of sold products) 18.9 18.2 UK and US Cat 1 (purchased goods and services) 6.7 6.6 UK and US Cat 7 (employee commuting) 5 5 UK and US Cat 6 (business travel) 11 6 UK & US Cat 5 (waste generated in operations) 7 6 Our commitment to being a responsible business continued 16_Our_commitment_to_responsible_business_p60_69_v117.indd 68 27/05/2022 16:58

As part of our principal partner role for COP26, we supported the UK government in developing a new international partnership, the Green Grids Initiative. The first programme of this initiative, a new UK-India initiative was launched at COP26, with the CEO attending the launch alongside the Prime Minister of the UK, Boris Johnson, and the Prime Minister of India, His Excellency Shri Narendra Modi, and Director General of the International Solar Alliance, Dr Ajay Mathur. The programme, which is also supported by the US government, aims to share lessons and expertise between the two countries and, in doing so, accelerate international decarbonisation efforts. We are providing personnel and expertise to support the programme. This initiative forms part of a number of programmes launched or supported by the UK COP26 presidency. We have also supported engagements with Indonesia, South Africa, Vietnam and Laos as part of our principal partnership of COP26, sharing lessons and expertise with peer utilities and energy ministries in those countries to build confidence in the path to net zero. Case study: COP26 activities – Green Grids Initiative Case study: Green Light Signal and EV Road Trip As we connect low-carbon power to our electricity networks we are creating the means to decarbonise much of the economy, including power, transport, industry and some heat. Engaging our customers and communities in the transition to net zero is key to building confidence and understanding of the transition to net zero. As part of our engagement, our customers and communities told us they were not sure how green their power was today and whether the transition would happen. So we wanted to show them. To show customers and communities how things were changing, in the UK we created a smart light bulb that turns green when the local power is low carbon, and in the US we created a number of EV Road Trips, to help build confidence in the transition to EVs. The Green Light Signal and associated ‘WhenToPlugIn’ app featured in UK national media, saw thousands of downloads, lit up 10 Downing Street ahead of COP26, and won a Bronze award at the Eurobest advertising awards. Our EV Road Trip received over 2 million impressions on social media and positive coverage from a range of stakeholders and the media. Right to left: National Grid CEO, John Pettigrew; UK Prime Minister, Boris Johnson; Indian Prime Minister, Shri Narendra Modi; and Director General of the International Solar Alliance, Dr Ajay Mathur – at the launch of the Green Grids Initiative, ‘One Sun One World One Grid’ at COP26 The EV Road Trip, took place in 2021, covering New York, Massachusetts and Rhode Island Green Light Signal, a smart bulb that glows green when the local power is low carbon 69 S trateg ic R ep o rt National Grid plc Annual Report and Accounts 2021/22 16_Our_commitment_to_responsible_business_p60_69_v117.indd 69 27/05/2022 16:59

Climate change is the defining challenge of the 21st century and in our role as The Energy Transition Company we understand the critical role we need to play in navigating the change and uncertainty facing the economies we serve in reaching their carbon reduction targets. That change and uncertainty presents significant risks and opportunities to our business model that we manage with the due focus and attention required to enable the positive, responsible change needed by all of our stakeholders. We are committed to developing a business model that is consistent with the objectives of the Paris Agreement, and therefore set a commitment in November 2019 to reduce our Scope 1 and 2 emissions to net zero by 2050. The details of the interim targets that we have set to achieve this are included in our RBC that we published in October 2020. This includes approved science-based targets for Scope 1, 2 and 3 emissions across our Group. This year sees the second iteration of our RBR which details our progress against all commitments set out in our RBC, including our emissions reduction targets. In this year’s disclosure we have fully complied with the FCA listing rule LR 9.8.6R(b). Our climate-related financial disclosures are considered to be consistent with the TCFD’s recommendations and recommended disclosures. Please see the index on page 71 for where we respond to each recommendation and recommended disclosure. In reaching full compliance this year, we have refreshed our energy transition scenarios and completed the first stage of our comprehensive Group-wide assessment into the physical risks facing the Group under 2°C and 4°C scenarios, with the outcomes detailed in this disclosure. We have also published our first Climate Transition Plan, which provides greater detail and clarity on how we will achieve our emissions reduction targets. Development of a best-in-class Climate Change Risk Tool to assess the physical impacts from climate change scenarios Acquisition of WPD which completes the pivot of our UK business towards electricity Specific science-based targets aligned to a 1.5 degree pathway for our UK Electricity Transmission and UK Electricity System Operator businesses Publication of provisional EU Taxonomy aligned KPIs, including our forecast EU Taxonomy aligned capital expenditure for the next five years CDP Climate A rating for 6th year in a row Continued development of our net zero strategy Principal partner for COP26 climate change conference Increased alignment of Executive remuneration to climate reduction targets Highlights of the year Crocker Wind Farm, National Grid Renewables, South Dakota, US 70 National Grid plc Annual Report and Accounts 2021/22 Task Force on Climate-related Financial Disclosures

Governance Disclose the organisations governance around climate-related risks and opportunities a) Describe the board’s oversight of climate-related risks and opportunities: page 72 – ‘Governance of climate-related risks and opportunities’ b) Describe management’s role in assessing and managing climate- related risks and opportunities: page 73 – ‘Management’s role’ Strategy Disclose the actual and potential impacts of climate-related risks and opportunities on the organisation’s businesses, strategy and financial planning where such information is material a) Describe the climate-related risks and opportunities the organisation has identified over the short, medium, and long term: page 79 – ‘Our significant climate-related risks and opportunities and our strategic response’ b) Describe the impact of climate-related risks and opportunities on the organisation’s businesses, strategy and financial planning: page 74 – ‘Our strategy and risk management for responding to climate change’, page 79 – ‘Our significant climate-related risks and opportunities and our strategic response’ c) Describe the resilience of the organisation’s strategy, taking into consideration different climate-related scenarios, including a 2°C or lower scenario: page 76 – ‘Physical modelling’, page 78 – ‘Transition scenarios modelling’ Our climate-related financial disclosures cover all of the TCFD’s recommendations and recommended disclosures. The following index navigates between our disclosures and the TCFD’s recommendations and recommended disclosures: Risk management Disclose how the organisation identifies, assesses, and manages climate-related risks a) Describe the organisation’s processes for identifying and assessing climate-related risks: page 74 – ‘Our strategy and risk management for responding to climate change’, page 74 – ‘Identifying and assessing the impacts of climate-related risks and opportunities’ b) Describe the organisation’s processes for managing climate-related risks: page 75 – ‘Climate change and enterprise risk management’ c) Describe how processes for identifying, assessing, and managing climate-related risks are integrated into the organisation’s overall risk management: page 74 – ‘Identifying and assessing the impacts of climate-related risks and opportunities’ Metrics and targets Disclose the metrics and targets used to assess and manage relevant climate-related risks and opportunities where such information is material a) Disclose the metrics used by the organisation to assess climate-related risks and opportunities in line with its strategy and risk management process: page 83 – ‘Climate change metrics and targets’, page 79 – ‘Our significant climate-related risks and opportunities and our strategic response’ b) Describe Scope 1, Scope 2 and, if appropriate, Scope 3 GHG emissions, and the related risks: page 83 – ‘Climate change metrics and targets’ shows cross-reference to separate ARA disclosure: page 26 c) Describe the targets used by the organisation to manage climate- related risks and opportunities and performance against targets: page 83 – ‘Climate change metrics and targets’ shows targets, where considered relevant The world’s first row of T-pylons, Hinckley Connection Project, UK 71 S trateg ic R ep o rt National Grid plc Annual Report and Accounts 2021/22

Board Audit & Risk Committee Ethics, Risk and Compliance Committee Group Executive Committee Other meetings and forums Remuneration Committee Reputation & Stakeholder Management Committee Responsible Business Steering Group People & Governance Committee Safety, Health and Sustainability Committee TCFD Steering Group Safety & Sustainability Committee Group Policy and Regulation Committee Investment Committee Business Unit Green Financing Committees Finance Committee Climate governance Governance of climate-related risks and opportunities The Board’s role The Board of Directors is responsible for setting and leading the Company’s climate- related strategy and goals, and has oversight of climate-related risks and opportunities impacting the Group. The Board in turn delegates some elements of responsibility to various sub- committees as described below. Our Board members bring a variety of skills and experience to the Board, including expertise in ESG and climate change matters. See page 88 – 89 for an overview of the Board’s skills and experience. In the year, the Board received regular updates from the Chair of the Safety & Sustainability Committee, providing an overview of matters discussed at the Committee meetings. This included updates on progress against goals and targets for addressing climate-related issues. The Board also receives a CEO report at each Board meeting which informs on how the Company is tracking against performance against metrics and targets and progress is reported through a regular dashboard. Additional updates received by the Board in the year are outlined here: • The Board was informed that the carbon emission reduction targets that had been set had been verified by the SBTi. • The Board was updated on current ESG positioning in the Company, including key strategy enhancements to keep pace with and to choose where to lead as a responsible business, and assurance around the right governance in place to provide a central organisational focus to drive strategy and performance. The Board was also updated on the impact of acquiring WPD on the Company’s ESG agenda and opportunities including climate-related matters. • The Board discussed various aspects of the US business with US management, which included an update on the significant acceleration of the energy transition following President Biden’s election and the Company’s key clean energy ambitions in the US strategy. • An enrichment session was hosted by the Chief Sustainability Officer and management to provide focus for the Board on the Company’s ESG and climate-related commitments, ahead of Board approval of year-end sustainability reporting. The session promoted the understanding of the architecture of the ESG commitments, the flow of approvals at various Committees, key stakeholders that are engaged in the process and to assure that ESG stewardship is well embedded at Board level. The Board also reviewed its entire governance framework in the year to ensure the remit of the Committees remained appropriate and well placed to progress the Board’s agenda going forward, in particular around tackling climate change and monitoring progress against net zero aims. Three of the Board Committees refreshed their remit and focus, including the Safety, Environment & Health Committee, which became the Safety & Sustainability Committee. Within the business there has been a continuing move towards clearer ownership of climate issues; a Chief Sustainability Officer was appointed in September 2021, providing a single point of accountability across the Group for our overarching sustainability strategy to help deliver the energy transition and ensure we drive our own emissions down to net zero by 2050. The Chief Sustainability Officer attends all Safety & Sustainability Committee meetings and provides regular updates at Board and management level, including holding a Board ESG enrichment session, covering ESG commitments, reporting and developments. The remit of the Board and its Committees under our governance framework is set out on page 91. Terms of reference for the Board and its Committees are available at nationalgrid.com. 72 National Grid plc Annual Report and Accounts 2021/22 Task Force on Climate-related Financial Disclosures continued 17_TCFD_p70_83_v86.indd 72 27/05/2022 17:02

The Safety & Sustainability Committee is responsible for assessing and monitoring the Group environmental sustainability strategy and performance, as well as how the Company adapts its business strategy considering potential climate change risks and opportunities. This includes reviewing whether appropriate progress is being made against our net zero aims. Progress around GHG emissions was considered and challenged in the year. The remit of the Committee was extended in the year to provide further oversight of climate-related matters including climate scenarios within TCFD and progress against the Company’s climate transition plan which they reviewed in the year. The Committee also noted the changes to the Group Climate Change Risk which moved from what was a single strategic risk, to two risks – one strategic and one operational. The Remuneration Committee recommends to the Board the remuneration policy for Executive Directors and the leadership team including approving how ESG targets are incorporated into our incentive arrangements. The Committee also reviews workforce remuneration and monitors related policies, satisfying itself that incentives and rewards are aligned to National Grid’s strategy, culture and long-term sustainable success. During the year the Committee considered the remuneration policy to be presented to shareholders for approval at the 2022 AGM and increased the proportion of incentives linked to ESG and progress against climate-related targets. The People & Governance Committee oversees a diverse succession pipeline, helping to ensure we have the right people to deliver our strategy and net zero ambition. During the year the Committee approved the appointment of several new Non-executive Directors, taking into consideration skills and experience including climate. Martha Wyrsch, appointed in 2021, brings sound knowledge and experience around climate-related issues through her experience as CEO of a major international gas transmission business, as well as leading the growth and development of Vestas’ renewables business in the US, where she spearheaded the expansion of its wind farm portfolio. Anne Robinson joined the Board in January 2022, bringing strong ESG experience and insight into investor perception around climate. Anne and Martha both joined the Safety & Sustainability Committee on appointment and along with the other members received an induction tailored to the Committee including around climate issues. See page 100 for more information around the skills and experience of our Board. The Audit & Risk Committee has oversight over non-financial disclosures and assurance, including our RBR reporting, TCFD reporting and reporting in line with leading ESG frameworks such as the Sustainability Accounting Standards Board (SASB), the Global Reporting Index (GRI) and the EU Taxonomy. The Committee received papers in March and May 2022 on the financial reporting and disclosure considerations in relation to climate change. The Finance Committee oversees our financing strategy, including the issuance of National Grid plc’s €850 million Green Bond in September 2021. The Finance Committee also considers the financial impact of environmental factors on our credit metrics and relevant considerations with regard to debt investors, pension and insurance strategy. Management’s role The Board delegates to management responsibility for asset investment and maintenance planning, implementation of the net zero strategy and overseeing the development of the RBC. Management is also responsible on a day-to-day basis for the climate-related risks and opportunities faced by the Group and for delivering the roadmaps to achieve the net zero strategy set by the Board. Throughout the year, the Group Executive Committee created a number of sub-committees with delegated responsibility over specialist areas that receive updates on climate-related matters ahead of presentation, where applicable, to the Board and Committees. The Safety, Health and Sustainability Sub-Committee reviews and manages Group-wide safety, environment and health tracking/monitoring and related decisions. The Chief Sustainability Officer attends this Committee, providing a link between management and Board discussions around climate-related issues. In the year, the Committee spent time reviewing progress against the Company’s climate-related targets and shaped related strategy. In particular, the Committee reviewed potential impacts on our climate strategy and progress towards net zero from external events including the war in Ukraine and the energy crisis. The Reputation & Stakeholder Management Executive Sub-Committee provides oversight of responsible business policy development and engagement including in relation to the RBR and climate-related disclosures. The Ethics, Risk and Compliance Committee oversees the implementation of the Group’s risk management framework and assessment of principal risks including climate change. The Policy and Regulation Sub-Committee agrees and provides strategic oversight of Group public policy priorities and positions. The Investment Committee has delegated authority to approve investment decisions including those related to our Renewables business. Other forums A TCFD steering group comprising representatives from Group External Reporting, Sustainability, Corporate Strategy, Group Risk and Company Secretariat oversees progress against the TCFD recommendations and the publication of our annual disclosure. A Responsible Business steering group, chaired by the Chief Sustainability Officer, provides oversight of the integration of responsible business into National Grid including the development of ESG targets and future ESG strategy. Business Unit Green Financing Committees chaired by the Group Treasurer, provide governance over our Green Financing Programme and approve the publication of our Green Financing Report, which provides an analysis of how we utilised the proceeds from our portfolio of Green Bonds and their environmental impact. Our businesses. Further delegation and responsibility is given to the core operational businesses including the Business Unit Presidents, who are responsible and held accountable for delivering the net zero roadmaps for their businesses. Our functions. Corporate Affairs, Group Finance, Sustainability and Group HR are responsible for supporting the businesses in achieving their net zero pathways. Paula Rosput Reynolds, onsite at London Power Tunnels, London, UK 73 S trateg ic R ep o rt National Grid plc Annual Report and Accounts 2021/22 17_TCFD_p70_83_v86.indd 73 27/05/2022 17:02

Our strategy and risk management for responding to climate change National Grid has four strategic priorities, as set out on pages 20 – 21, the first of which is to enable the energy transition for all. We have committed to support the decarbonisation of the communities that we serve, migrating to cleaner energy solutions. We have also committed to enabling a fully decarbonised electricity grid, to lead the way on the decarbonisation of gas and to enable the decarbonisation of transport. To support these strategic ambitions, we have recently executed a strategic pivot, via three transactions which will enhance our role in the energy transition. These transactions were the acquisition of WPD, the UK’s largest electricity distribution network operator, in June 2021; and the proposed sales of our Rhode Island gas and electricity business in the US and of a majority stake in our UK Gas Transmission business expected to complete during 2022. Upon successful completion of all transactions, the contribution of electricity to National Grid’s portfolio will increase to around 70% of the Group. Across all of our businesses, we aim to play a leading role in enabling and accelerating the transition to a clean energy system, balancing decarbonisation, affordability and reliability of supply. Working closely with governments, other stakeholders, subject matter experts, and partners around the world and through our work for COP26, we focus on the technical and commercial solutions that will help achieve net zero for the energy sector. The biggest impact we can have is in enabling the economy-wide clean energy transition, but we must also reduce our own impact on the environment and strengthen our resiliency to risks that we have less control over. To accomplish this, our RBC commitments to reduce Scope 1 (direct emissions from our operational activities), Scope 2 (indirect emissions from our purchase and use of electricity) and Scope 3 (other indirect emissions from our value chain activities) emissions align with the requirements of the Paris Agreement and SBTi. These commitments, along with our overall suite of environmental sustainability initiatives, are reviewed in accordance with our quarterly business reviews, incorporating the risk and opportunities management processes detailed below, and reported accordingly to the Group Executive Committee and Board. Carbon pricing is one of the tools we use to support the delivery of our emissions reduction targets. We participate in traded carbon markets where our operations are covered by these frameworks, have regulatory incentives to reduce SF6 and methane emissions that are underpinned by a carbon price, and have applied an internal carbon price of $60/£45 per tonne (set in 2017) in investment decision making. Additionally our latest UK regulatory agreements apply a price of £241/tonne. We’ve found that a carbon price alone is unlikely to drive the changes needed to meet our net zero goals. As important are policies and commitments, such as those we have to remove and reduce SF6 leakage on our networks, and replace our fleet with electric vehicles. We are currently reviewing our approach to investment decision making to ensure we have the right mix of approaches to meet our commitments. Identifying and assessing the impact of climate-related risks and  opportunities The scale of ambition and speed of change required to meet net zero emission targets, along with the changes in weather patterns, present both risks and opportunities to our business. These risks and opportunities, which are informed by our physical and transition risk scenario analysis and our horizon scanning processes, are built into our business planning and investment decision processes where we assess the degree of exposure to climate-related financial risks and opportunities. For our regulated businesses, our plans to address these are formulated with and agreed to by our regulators. Our management is incentivised through our target setting and remuneration policy to deliver the actions necessary to achieve our net zero objectives. This year, we agreed new ESG-related targets for our long-term incentive programme as detailed on page 113. We also launched a suite of internal climate change e-learning modules to help all employees learn more about climate change and our role in the energy transition. To accompany this, we conducted extensive pre- and post-COP26 employee engagement campaigns. See page 75 for detail on our scenario modelling and page 79 for further detail on the significant risks and opportunities we identified and our response. With funding from Ofgem’s Strategic Innovation Fund (SIF), we are delivering three innovation projects to help deliver a net zero electricity network. • The Sustainable Electrical Gas Insulated Lines (SEGIL) project will investigate the feasibility of an SF6-free Gas Insulated Line (GIL) solution to provide cost competitive, high-capacity transmission connections over 2000MVA to increase available network capacity for new offshore wind generation. The project will look at the options to replace SF6 with alternative low-carbon footprint gases as a viable means of GIL insulation. • The Super Conductor Applications for Dense Energy Transmission (SCADENT) project will develop an understanding of the barriers, opportunities, and benefits of modernising existing electricity infrastructure by replacing conventional cables with the use of High Temperature Superconductor (HTS) cable technology. This will increase network capacity, delivering time, cost, and carbon savings with reduced energy losses and wider environmental benefits including reduced disturbance to local communities caused by construction activities. • The Eye in the Sky Project, which utilises satellite data to improve grid resilience in emergency situations, will investigate new satellite data analytics solutions that can help GB networks to improve the visibility of infrastructure and assets, response in emergency and risk assess effects of climate change. Novel uses of satellite data and digital platforms can significantly improve network planning, modelling and forecasting capabilities, and improve the response to climate change effects like flooding, strong wind, snow storm or wildfire and provide warning to the networks for better planning and resource allocation during extreme weather events. Case study Innovation for net zero 74 National Grid plc Annual Report and Accounts 2021/22 Task Force on Climate-related Financial Disclosures continued 17_TCFD_p70_83_v86.indd 74 27/05/2022 17:02

Climate change and enterprise risk management Climate change is considered as part of our ERM process and has been one of our GPRs since autumn 2019. The ERM process is the framework through which the Group identifies, assesses, prioritises, manages, monitors and reports risks. This process is described on page 28 and includes the identification of a series of Group-wide controls and actions to mitigate the climate change principal risk (this is further described on page 30). Historically, the climate change risk at the GPR level was managed through one broad risk covering both physical and transitional impacts of climate change on our business. In December 2021, the Executive Ethics, Risk & Compliance Committee agreed to split the climate change GPR into two distinct elements: adaptation and mitigation child risks. This has enabled greater alignment to our strategic objectives. The adaptation activity, absorbed within the ‘significant disruption of energy’ risk’s control framework, will help ensure we continue to ‘deliver for our customers efficiently’, and the new standalone mitigation risk is aligned to our strategic objective, ‘enable the energy transition for all’. This has generated greater oversight, focus and adoption of two distinct and proportionate control frameworks in line with the new Group risk appetite – mitigating downside risk, and maximising opportunities, where applicable. Original Group climate change principal risk There is a risk that we fail to identify and/or deliver upon actions necessary to address the physical and transitional impacts of climate change on our business and demonstrate our leadership of climate change within the energy sector. 1. Climate change adaptation risk The adaptation risk relates to the physical impact of climate change to our assets across the Group. This adaptation element of the original climate change risk is managed as part of the ‘significant disruption of energy’ GPR, wider resilience activity and associated internal controls. 2. Climate change mitigation risk The mitigation risk relates to our Group-wide strategy for climate change including our commitments of achieving net zero, and the role our Group plays in driving the energy transition. This is now managed as a standalone GPR. We have further developed our risk and opportunity horizon scanning to assess critical trends to the energy transition. With our senior stakeholders and supported by external risk experts, we identified key indicators and metrics which are measured on a monthly basis versus thresholds. These are analysed against our current strategy and business plans for their potential impact and plausibility. Emerging risks are managed under our risk management framework with results reviewed by senior leadership (detailed further on page 29). Integration of climate change into our overall risk management Consistent with the Group’s overall approach to risk management and internal control, climate change risk management activities take place through all levels of our organisation. Our risk governance model drives an effective ‘top-down, bottom-up’ approach which allows the Group Executive Committee to define and cascade the GPRs to each business area; and in parallel, all business areas identify and escalate the operational risks that could impact their business model and objectives. The disclosure on page 28 provides further detail. The Group’s Risk Taxonomy supports all levels of the business to categorise any climate change risk into one of our four taxonomy groups: strategic, operational, financial and compliance; sub-categories beneath these four groups allow the business to select a more granular taxonomy grouping with an assigned risk appetite. The individual business unit or Group Function Risk Committees oversee, discuss and challenge new and existing climate change risks using the ERM framework and scoring methodology to ensure each risk has an appropriate inherent, current and target score for likelihood, financial and reputational impact. Where current risk levels are outside of agreed target scores and our risk appetite (based on the taxonomy), the business area implements actions and internal controls to close the gap. To support accountability for both aspects of climate change risk, each business unit and applicable Group functions are currently in the process of considering, and where necessary, adopting an individual adaptation and mitigation child risk. As WPD is new to the Group, we are still in the process of integrating WPD into our ERM processes and will report back on our progress with respect to WPD’s climate change risk management next year. Our climate-related scenario analysis Scenario analysis to 2050 and beyond guides our strategic and financial planning with respect to climate change. Our scenarios consider the potential physical impacts to the Group of average global temperature increases of 2°C and 4°C. We also consider potential transitional impacts of scenarios of average global temperature increases of 1.5°C in accordance with the Paris climate agreement. Transitional scenarios modelled Physical scenarios modelled Slow progress • Decarbonisation progress is made but too slow to meet net zero targets • Increase in distributed generation and local solutions where local authorities compensate for lack of overall national progress • System becomes increasingly unequal Orderly transition • Reaches most net zero targets through an orderly approach • Governments pursue suite of solutions for large-scale and consumer options • Coordinated pathway between key market players e.g. orderly reduction in natural gas • Increased investment in renewable electric generation and networks • Gas network evolution to allow H2 clusters and/or clean gas blending Acceleration • Reaches 2030 net zero targets to be on track for 2050 • Electrification of heat and transport at fast pace • Accompanied by large-scale investments (network, storage) • Increased grid scale and interconnection with smart homes and end-use electrification • Faster gas demand reduction 75 S trateg ic R ep o rt National Grid plc Annual Report and Accounts 2021/22

The hazards that we consider are: Coastal flooding River flooding High and low temperatures Heatwaves High winds Freeze-thaw cycles Lightning High winds and high precipitation Physical insights In assessing the physical impacts of our scenarios, we grouped our portfolio of assets into 12 asset types to assess vulnerability to these hazards. For our 2 degree scenario, the climate data was not yet available in the UK national climate assessment chosen for this analysis, but based on the US findings under this scenario, we can assume similar impacts in the UK, as outlined below. Note, vulnerability to hazards does not mean that risks will be realised. Whether vulnerability translates into risk depends on the exposure (location) of individual assets relative to projected changes in climate hazards, as well as any site-specific resilience measures in place. Although to a lesser degree, our analysis has identified consistent risks that exist today, e.g. flooding, consistent with our wider risk management we are implementing necessary responses to those risks, e.g. flood defences, to ensure reliable operation of our assets and sufficient resilience today as well as into the future. Most hazards are projected to increase in frequency in the future, with high temperatures and coastal flooding of particular concern. In most cases the level of risk is greater in a 4°C scenario than a 2°C scenario. The scenarios executed in 2021/22 build on those of previous years and will evolve as we continually monitor emerging trends in technology and wider market developments. We developed the following stretching, plausible alternative futures for our society by using different assumptions across variables, including (but not limited to) technology, policy, consumer behaviour, competition and science. We tested the resilience of our business strategy against these different transition scenarios, whilst focusing our physical risk scenarios on the climate change hazards which present the greatest physical risk to the Group’s operations. Physical modelling The climate hazards that we tested in our 2 degree and 4 degree scenario analysis are summarised below. The climate hazard data is sourced from the national climate assessments (NCA4 in the US, and UKCP18 in the UK). These assessments include data from the Federal Emergency Management Agency, NOAA Physical Sciences Laboratory, Environmental Protection Agency, Met Office, Environment Agency and academic literature. The scenario data is modelled using IPCC’s Representative Concentration Pathway (RCP) scenarios of RCP8.5 (4°C) and RCP4.5 (2°C). Climate hazard Definition and Threshold Potential change by 2070s (4°C scenario)* Confidence level Coastal flooding Frequency of occurrence of coastal flood and future impacts due to sea level rise Significant increase in frequency Medium River flooding Frequency of occurrence of river flooding due to over 25mm (1 inch) daily rainfall Significant increase in frequency Medium Storms (Compound Events) Number of days per year when high winds are above 34 m/s (76 mph) and high rainfall above 25mm (1 inch) on the same day. Displayed separately for summer (March – August) and winter (September to February) seasons Summer – slight increase in frequency Winter – no change in frequency, but potential increase in intensity Low High wind Number of days per year when maximum daily wind gust is above 34 m/s (76 mph) Decrease or no change in frequency, but increase in intensity Low Lightning Number of lightning events Increase in frequency Low High temperatures Number of days per year when maximum daily temperature is above 30°C (86°F) in the UK and 95°F (35°C) in the US Significant increase in frequency High Low temperatures Number of days per year when maximum temperature is below 0°C (32°F) in the UK and 10°F (-12°C) in the US Decrease in frequency High Freeze-thaw cycles Number of days per year when maximum daily temperature is above 0°C (32°F) and minimum daily temperature is below 0°C (32°F) in the same day Significant decrease High Heatwaves Number of times per year when maximum daily temperature is above 30°C (90°F) and minimum daily temperatures is above 20°C (70°F) for 3 consecutive days Significant increase in frequency High * The UKCP18 national climate assessment does not include data for the 2°C (RCP4.5) scenario. Therefore, the above highlights the potential changes under a 4 degree scenario for both the UK and the US. The changes outlined will still occur under the 2 degree scenario but there will be more intense and higher frequency of occurrence under 4°C. 76 National Grid plc Annual Report and Accounts 2021/22 Task Force on Climate-related Financial Disclosures continued

Storms (compound hazards) are difficult to assess with confidence but they are likely to be more intense, though changes in frequency are unclear. We do know that climate change will lead to increased rainfall, wind speeds, and coastal flooding/storm surges due to sea level rises, so this may make future coastal storms more damaging. Our risk assessment shows the risk to our existing asset portfolio only. If the distribution and types of assets change, then the cumulative picture of risk will change too. Risks from river and coastal flooding are significant for all asset types now and in future climates. By the 2070s, almost all assets by the coast may be at high risk from coastal flooding. In coastal areas, assets can be exposed to increases in occurrence of coastal flooding and high temperatures in the future. For some asset types, most of the infrastructure is located in coastal areas, such as terminals and converter stations in the UK, and LNG/CNG facilities and generation assets in the US. Generation assets on Long Island are highlighted for the particular risk of coastal flooding. Risks from high temperature and heatwaves will increase significantly over time for many asset types, particularly overhead lines for transmissions and distribution. Underground infrastructure is protected from high wind, compound (storm) events and lightning. Most hazards are projected to increase in frequency in the future, with high temperatures and coastal flooding of particular concern. In most cases, the level of risk is greater in a 4°C scenario than a 2°C scenario. Some gas pipeline infrastructure in the US has a high risk of low temperature and freeze-thaw hazards today. We have developed an innovative Climate Change Risk Tool (CCRT) which allows each business to make more tailored use of the scenario analysis. The CCRT is available to all, so offers a simple way for employees such as asset owners, strategy managers and senior leaders to access the information they need for their particular interest area and at the right level of detail. The CCRT gives a UK and US geographical overview of climate change risk and allows users to filter information focused to their business area, specific asset types and to a grid square level of 12km in the UK and 7km in the US. The hazards that we consider are: The CCRT shows the changing climate change risk profile for 2030, 2040, 2050 and 2070. An example of the results from the CCRT showing the changing risk profile of high temperatures on our UK Electricity Transmission assets under a 4 degree climate scenario is shown on the right. The CCRT shows that as we progress out to 2070, there will be an increased frequency of high temperature as a hazard in the UK, i.e. the number of days per year when the maximum daily temperature is above 30°C (shown on the-left hand graph and map). We can then see on the right-hand graph and map the level of risk this translates for our ET assets across the network and over time. Case study: Climate Change Risk Tool The insights from our physical risk scenario modelling show that all scenarios will result in physical impacts to the Group’s assets across consistent areas of our operations; however, the impacts are most material in a 4°C scenario. We are continuing to progress our physical risk analysis to inform our strategic planning and investment choices. Over the next year, we aim to implement a higher resolution assessment of key risks identified, particularly where risk is extremely localised, e.g. flood-related risk and coastal areas which are exposed to multiple hazards. We will consider the interdependencies between hazards to better understand the resiliency of asset criticality and prioritisation of actions to reduce risks. We also aim to add socio-economic data into the model, to understand where communities at greater socio- economic risk, like environmental justice communities, and at-risk assets are coupled. The next version of our risk assessment will also incorporate National Grid Renewables and WPD. For further detail on our assessment of the physical impacts of our scenario modelling, please refer to the Climate Change Risk Tool case study below. 77 S trateg ic R ep o rt National Grid plc Annual Report and Accounts 2021/22

Urgent collective action required across society To reach net zero requires new policies and technology development. Action is required by a wide range of stakeholders in the industry as a result of the public expectations on climate change; there is a push for new policies, action and government and State targets in the regions we operate. Retaining consumer buy-in will be key To reach net zero, consumers can drive domestic heating and transport decarbonisation by switching to low-carbon alternatives such as EVs and heat pumps. EVs are expected to represent 90% of the fleet by 2050 with 30% of households electrified. Electricity use and share of final demand will increase Grids are expected to grow to deliver an increase of 50 – 160% of current demand by 2050 as fuel switching reduces final energy demand with both heating and transport sectors decarbonising. Energy supply structure will shift There will be a shift to renewables power, notable offshore wind and solar. Offshore wind is expected to triple in output from 2030 to 2050. Pathways will adapt to global and local realities The US Northeast region is expected to import hydrogen to support decarbonisation, but in the UK Blue hydrogen and CCUS may develop due to policy and geology. 1 2 3 4 5 Insight and factors Transition scenarios modelling Our transition scenarios are developed using driving forces which we monitor regularly as part of our risk management process and annually in our strategic horizon scan. In our analysis, we do not make a judgement on the likelihood of any one scenario relative to others; and by design, the analysed scenarios do not encompass all possible future pathways and their associated risks. There are limitations within the scope of our modelling, e.g. available data across other sectors, but to minimise this impact we have utilised a wide range of resources and compared our results with external scenarios. Transition insights Whilst current global climate policies and actions suggest a lower than 4°C scenario, a 4°C scenario was still modelled in line with our approach to scenario modelling outlined above. The transition impact to the Group is most significant in scenarios resulting in a lower degree of warming given the increased action required. The following five transition insights are therefore most relevant to a 2°C (or lower) scenario. However each still applies, albeit to a lesser extent, to a 4°C scenario as well. How we manage our climate-related risks As part of our ERM process, risk owners and other key stakeholders establish internal controls to manage the risk within appetite. Regular risk reviews consider the effectiveness of individual controls as well as the collective strength of the internal control framework which determines the financial and reputational impact, and likelihood of the risk to materialise. Where current risk levels are outside of agreed target scores and our risk appetite, remedial or continuous improvement plans will be agreed to mitigate the current risk score. The controls for our new climate change principal risk (mitigation) have evolved in line with our strategy and regulatory frameworks. They include controls on strategic oversight and governance (for example, Board and Group Executive Committee sign-off on strategy and oversight of delivery against net zero action plans), business unit roadmap and operational plans to deliver net zero targets (that are aligned to Group’s strategy) and investment plans (providing leadership to structural changes, e.g. bringing to scale new technologies). Controls related to the climate change risk are also reflected throughout other relevant risks, for example regulatory outcomes; political and societal expectations; and significant disruption of energy. The significant disruption of energy risk and controls demonstrates how we are adapting as an organisation to manage the impact of climate change to our assets. Our key climate adaptation controls include the following: • Fit for Future of Electricity Strategy: a corporate strategy that considers the future electricity business, including our network resilience and changing environment, and the steps to ensure our business remains resilient in the future, such as enhanced design standards, and investments on asset hardening and flood protection. • Engineers Governance forums: Chief Engineers and Engineering Duty Holders meet to provide guidance and data-sharing on key topics such as resilience. • Resilience and Asset Management Business Management Standards (BMS): sets out minimum requirements and framework for resilience capability and managing asset risk to ensure each business unit is prepared for the next disruptive event, including the changing environment. • Organisational Resilience Competency Framework: to guide, measure and where applicable, heighten our resilience response across the Group under different climate change scenarios. • Business Continuity and Crisis Management: ongoing development of a new business continuity software application to ensure a consistent view across the Group, and internal crisis management tool to respond more effectively to incidents, drive consistency, and identify and track actions. The quality of assurance over key controls has been enhanced following roll-out of a new control testing methodology, that integrates the first line and second lines of defence. None of the transition scenarios tested threaten the viability of the Group and we are in a strong position to adapt our portfolio to maximise the opportunities of the energy transition. 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 79 – 82. 78 National Grid plc Annual Report and Accounts 2021/22 Task Force on Climate-related Financial Disclosures continued

79 S trateg ic R ep o rt National Grid plc Annual Report and Accounts 2021/22 Key controls related to Group and business areas GPRs are self-assessed by first line teams (control owners and/or performers), and tested by second line teams, who review the design and operating effectiveness; all captured in our GRC system. Any ineffective controls are identified and remediated. Risk owners across the Group have the ability to view assurance of their controls in real time, using newly developed PowerBI dashboards. As outlined above, with regard to our greenhouse gas emissions, where specific actions are identified to achieve our strategy, drive desired behaviours and manage our risks, we set SMART targets for those accountable. Performance against those targets is published transparently, principally through the RBR and the results contribute to the assessment of remuneration for those accountable. For the most material performance measures, an external assurance opinion is received over the accuracy of preparation; a copy of this opinion can be found on our website. Our significant climate-related risks and opportunities and our strategic response Guided by our scenario modelling, strategic planning and risk management approaches articulated above, the climate-related risks and opportunities that pose a potentially significant financial or reputational impact are detailed below, along with our basis of measuring the risk/opportunity and our strategic response to each risk/opportunity that underpins our resilience assessments. To assess the relative materiality, we established scope of impact, timeframe and likelihood for each risk and opportunity using internal analysis, market data and input from subject matter experts across our business. Refer to the subsequent section for further information on measurement indicators, including our performance against them. We assessed which businesses would be impacted against whether there was a risk that could materially affect our ability to meet business objectives and/ or, is of material importance to stakeholders. The timeframes we have used to assess the climate-related risks and opportunities are short: up to 2025, medium: from 2025 to 2030 and long-term: from 2030 to 2050. Our ‘likelihood’ assessment is an indicative estimate of the probability for material financial impacts with reference to the following categorisation: • Low: Very unlikely to unlikely • Moderate: About as likely as not to occur • High: Likely to very likely to occur Risk/opportunity Potential impact Our response 1. Transition Risk & Opportunity Retaining customer buy-in will be key: cost transparency and scrutiny on Network Operators is likely to increase as there will be a focus on the impact of transition costs on customers’ bills. Whilst National Grid can support the progression towards an affordable transition, there is a risk that customers and/or regulators may perceive that too little is being done to manage pressures on affordability, resulting in damaged reputation and damaged regulatory relationships. Business: Group-wide Timeframe: Short, medium and long term Likelihood: Moderate Measurement indicators: % of NG transmission/distribution costs on customer bills, customer trust survey, feedback through the fair transition plan. The reputation of our business has wide implications to our operations; affecting our regulatory negotiations and the resulting regulatory returns and incentives of the frameworks within which we operate. Our reputation can affect our cost of doing business, from customer feedback, employee retention, productivity, supplier relationships, and ultimately our share price. All have impacts that can move in either way, depending on our perceived success in enabling the fair and affordable energy transition. Due to the nature of the risk/ opportunity, and the degree of external variables affecting the matter, it is difficult to meaningfully quantify the risk. However, if not managed effectively, it could undermine the corporate strategy and materially impact our financial performance. Being at the ‘heart of a clean and fair transition’ is our purpose and our regulatory strategy team has a strong focus on affordability for consumers, working with regulators to minimise impacts to customer bills and to introduce affordability mechanisms. We will also advocate for anticipatory investment to minimise the costs to consumers and will use our CCRT to inform our investment decisions to ensure the resilience of our assets. An example of our focus on affordability for customers is our recently launched Expanded Solar-For-All programme in the US, where nearly 160,000 National Grid upstate New York electricity customers will benefit from new solar-energy bill credit, thanks to a joint offering from National Grid and the New York State Energy Research and Development Authority (NYSERDA). The Expanded Solar-For-All programme, approved by state regulators in January 2022, will automatically provide monthly credits to income-eligible customers enrolled in National Grid’s Energy Affordability Programme. The programme is designed to deliver the benefits of community solar to low-income customers, who are often shut out of renewable energy sources due to cost. Community solar is a large array of solar panels at an offsite location that allows customers to access solar power without installing panels on their homes. Developers build and operate the community solar projects, and energy delivery companies like National Grid purchase and distribute the credits generated by the projects to participating customers. The bill credits would grow over three years as the programme expands, with customers receiving monthly discounts. In Expanded Solar-For-All’s first phase, National Grid anticipates providing $240 million in total bill credits during the 25-year lifetime of the programme. A proposed second phase would further expand the programme, doubling the total anticipated bill credits to $480 million over the programme’s lifetime. The second phase will be contingent on approval by state regulators. The Expanded Solar-For-All programme brings to life two pillars of Project C, National Grid’s commitment to the communities where we work and live: clean energy and sustainability, and environmental justice and social equity. 17_TCFD_p70_83_v86.indd 79 27/05/2022 17:03

80 National Grid plc Annual Report and Accounts 2021/22 Risk/opportunity Potential impact Our response 2. Transition Risk & Opportunity Urgent collective action is required: with its central role as the backbone of the energy sector, National Grid can play a crucial role in the transition. As a result, public focus will increase on our Company, increasing reputational risk. Business: Group-wide Timeframe: Short, medium and long term Likelihood: Moderate Measurement indicators: GHG emissions, Climate Transition Plan, customer feedback The reputation of our business has wide implications to our operations; affecting our regulatory negotiations and the resulting regulatory returns and incentives of the frameworks within which we operate. Our reputation can affect our cost of doing business, from employee retention, productivity, supplier relationships, customer feedback, cost of/access to finance and ultimately our share price. All have impacts that can move in either way, depending on our perceived success in enabling the energy transition. Due to the nature of the risk/ opportunity, and the degree of external variables affecting the matter, it is difficult to meaningfully quantify the risk. However, if not managed effectively, the matter could undermine our corporate strategy and materially impact our financial performance. To date, we have endeavoured to take account of this by being at the heart of a fair, clean and affordable future, working with governments, policy makers and regulators to shape net zero strategy. Accordingly, we have positioned ourselves as ‘The Energy Transition Company’ acting as a principal sponsor of COP26, and our ESO business has set an ambition to operate a zero-carbon system by 2025, with the goal to run 100% carbon free energy 24/7/365 by 2035. We will continue to focus on enabling the transition, including working in partnership with our regulators and other stakeholders to develop investment plans in line with the net zero commitments of their jurisdictions, whilst managing the costs to consumers. We have developed roadmaps and track progress against key milestones for each of our business units which include the actions, conditions and assumptions that will support the delivery of our emissions reduction targets. These plans are consolidated into a group roadmap which is presented in our Climate Transition Plan, which we’ve published alongside this year’s Responsible Business Report. 3. Transition Opportunity Electricity use and share of final demand will increase: with the transition pivoting energy needs from fossil fuels to cleaner gas and electricity, the Group will deliver a larger share of society’s needs in the future. This will increase investment opportunities as growth is across transmission and distribution electricity networks. Business: ET, ED, NY, NE, NGV, ESO Timeframe: Short, medium and long term Likelihood: High Measurement indicators: EU Taxonomy KPIs, green capex forecasts, GHG emissions Sensitivities have been run versus our business plan to investigate the impact of the scenarios and we will continue to monitor triggers to capital expenditure. We estimate that the Orderly Transition or Acceleration scenario would result in an increase over the Slow Progress scenario of between 0.5% to 1.0% in underlying operating profit CAGR over the period to 31 March 2031. Capital expenditure increases may include expanding electricity networks, natural gas leak reductions and investment and expansion of renewable generation operations, but these are expected to be within our regulatory regime. Beyond 2030, and in line with our scenario modelling, the trends towards greater electrification, driven by expanded renewables generation and investment into decarbonising our gas networks is expected to continue and may accelerate. Our acquisition of WPD positions National Grid for this increase in electricity use across transmission and distribution. We are also continuing to invest in both onshore renewables via National Grid Renewables and in our interconnector portfolio, which will form an important part of UK decarbonisation. Across our businesses, we are also heavily investing in the infrastructure required to support the decarbonisation of transport and during 2021 in the US we delivered 1,684 EV charging ports in our jurisdictions, a company record for a calendar year. We are also carrying out critical studies and pilots exploring how to decarbonise our gas networks, for example the HyGrid project described in Transition Risk 6 and the FutureGrid project, which is testing the possibility of converting the NTS in the UK to transport hydrogen. In the UK, we are continuing to work with the Department for Transport and the Office of Zero Emissions Vehicles to ensure that the underlying network infrastructure is in place, ahead of need, to support the successful delivery of Project Rapid. We welcomed the Transport Decarbonisation Plans commitment to publish an Electric Vehicle Charging Infrastructure Strategy and establish a Delivery Body to progress the grid upgrades required to meet future ambitions. We also continue to engage with key stakeholders from across all modes of transport through our ‘ask, not tell’ engagement principles to understand the main barriers and potential future demand and infrastructure requirements for each sector. Task Force on Climate-related Financial Disclosures continued 17_TCFD_p70_83_v86.indd 80 27/05/2022 17:03

81 S trateg ic R ep o rt National Grid plc Annual Report and Accounts 2021/22 Risk/opportunity Potential impact Our response 4. Transition Risk Electricity use and share of final demand will increase, alongside increasing volumes of intermittent renewable energy. System resilience will be key to ensure security of supply. Business: ET, ED, ESO Timeframe: Short, medium and long term Likelihood: Moderate Measurement indicators: Network reliability Our role as the ESO is pivotal to delivering the energy transition. If the system operator is not prepared with the systems and processes to operate a decarbonised energy supply system, there will be significant costs from increased market inefficiency and the potential for network outages impacting our customers. In the shorter term, failures could affect us through lost regulatory incentive income, which link directly to reliability. See our Segmental analysis and Revenue notes on pages 156 and 158 for further detail on the size of our ESO business. Our ESO business is investing to ensure it is able to operate the system safely and securely at zero carbon whenever there is sufficient renewable generation online and available to meet the total national load. This year, the ESO agreed to contracts with five parties, worth £328 million over a six-year period, in a world-first approach to managing the stability of the electricity system. We are also supporting the accelerated development of electricity grids worldwide. At COP26 we joined the UK and Indian governments to launch the Green Grids Initiative, One Sun One World One Grid (GGI-OSOWOG), aiming to accelerate global expansion and modernisation of energy grids. This is an ambitious plan backed by over 80 countries and looks to harness the full potential of renewable resources globally, through much greater interconnection of electricity grids, so electricity can be moved from where it’s generated to where it’s needed. The GGI will help make this happen by bringing together a global coalition of stakeholders, including governments and businesses, to speed up the expansion of energy grids across regions and continents. We are playing a leading role in this as a member of the GGI. 5. Transition Opportunity Energy supply structure will shift: Growth in investment will occur in our markets as well as in adjacent markets, providing opportunity for our NGV and NGP businesses. As pathways adapt to global and local realities, technologies and market expectations will develop new commercial opportunities from the transition towards net zero that will continue to present opportunities to shape our portfolio and strategy. Business: NGV, NGP Timeframe: Short and medium term Likelihood: Moderate Measurement indicators: NGP value creation, NGV capital investment, EU Taxonomy KPIs, cumulative investments into large-scale renewables, investment in R&D With effective investment and proactive market engagement, there will be opportunities to grow new and existing revenue streams and to generate sustained green capital investment. We also anticipate the opportunity for investment in large-scale renewables to expand as the energy transition accelerates, with further innovation to create opportunities of additional revenue streams in the future. Our capital investment forecast to 2026 contains c.£1.6bn relating to renewables. Our NGV and NGP businesses actively monitor and participate in emerging growth opportunities and will continue to do so in the future. During the year, National Grid Renewables invested £199 million into renewable generation assets via the Emerald joint venture. Further to this, NG Renewables invested £223 million in the offshore wind seabed lease awarded in the New York Bight. During the year, NGP, our venture capital business that invests in energy technology startups, made 13 new investments bringing the total portfolio value to $491 million across 38 investments. Example investments include: TS Conductor, a California-based company whose technology replaces legacy materials in high-voltage electricity transmission lines with a next-generation conductor that doubles the lines’ capacity without the need to retrofit towers or other infrastructure; and Risilience, a UK-based startup that helps companies manage their transformation to net zero emissions. We also continue to invest in our interconnector portfolio and, once Viking Link becomes commercially operational in 2023/24, NGV will hold 7.8 GW of interconnector capacity and the focus will switch to multi-purpose interconnectors, which will increase interconnection and facilitate the construction and expansion of wind farms in the North Sea. 17_TCFD_p70_83_v86.indd 81 27/05/2022 17:03

82 National Grid plc Annual Report and Accounts 2021/22 Risk/opportunity Potential impact Our response 6. Transition Risk Pathways will adapt to global and local realities: there are multiple net zero pathways for heating which have different impacts for our US gas activities. Whilst all pathways expect a reduction of the usage of fossil gas in the long term, there are opportunities for the development of fossil-free alternative fuels. The different pathways result in a risk that our natural gas infrastructure will not be useful as long as is currently assumed in our financial planning and accounting. Business: NY, NE Timeframe: Long term Likelihood: Moderate Measurement indicators: Gas UEL sensitivities, GHG emissions, Climate Transition Plan We have performed sensitivity analysis to assess the impact shortening the useful economic lives of our gas business assets would have upon the Group’s financial results, which may result in an increase in depreciation expenses of up to £180 million to 2050 for US regulated assets. This sensitivity calculation excludes any assumptions regarding the residual value for our asset base and the effect shortening asset depreciation lives would be expected to have on our regulatory recovery mechanisms. For further information, see page 181. We are pursuing zero fossil fuel gas and electric systems by 2050, if not sooner, in the US. The vision proposes a hybrid approach to heating that enables customers to have more affordable and practical choices to become fossil-free. More details can be found in our Vision Report https://www.nationalgrid.com/us/fossilfree. We will continue to engage in key regulatory proceedings and processes in New York and Massachusetts to maximise recovery on our gas business assets. These include the ongoing DPU 20-80 ‘Future of Gas’ proceeding in Massachusetts and a KEDNY/KEDLI depreciation study that will be submitted to the New York PSC in advance of our rate case filing in 2023. 7. Physical risk Our assets are at risk of physical impacts from extreme weather events such as storms and flooding. There will also be increased frequency of weather incidents and changing long-term climate trends leading to asset damage and operational risks. Business: Group-wide Timeframe: Short, medium and long term Likelihood: High Measurement indicators: Network reliability, major storm costs, climate change risk tool outputs We experience significant costs as a result of asset damage and operational interruptions due to major storms (2021/22: £163 million 2020/21: £150 million). We therefore continue to invest in storm hardening across the Group, with a further £36 million invested in the year. We are in the process of expanding our scenario modelling to forecast the likely financial implications of a 2 and 4 degree scenario over the long term. We expect to report these results in our 2022/23 reporting. An example of our work in this area is the $741 million of investment our New York business has committed to in the five year capital investment forecast to FY26. This investment covers a range of storm hardening measures, upgrades and repairs to our infrastructure to make it less susceptible to storm damage. These include inspection and maintenance, minor storm hardening, vegetation management, flood mitigation, side tap fusing, and multi-value transmission reliability. In the UK, our ESO business has undertaken Mapping Impacts and Visualisation of Risks (MIVOR) of extreme weather on system operation to evaluate the impacts of extreme weather events on system operation up to 2050 under RCP 4.5. The results will enhance the accuracy of energy system impact modelling and will also focus on the impacts of the whole supply chain, renewable generation, network assets, and demand, ensuring that the learnings produced are relevant to the whole energy system. Task Force on Climate-related Financial Disclosures continued 17_TCFD_p70_83_v86.indd 82 27/05/2022 17:03

comprise several business unit level metrics that are then tracked and monitored by business unit, and presented to senior management on a quarterly basis, with accountability at the local level. With reference to the principles of the EU Taxonomy, we have disclosed the proportion of our IFRS revenue, operating expenditures and capital expenditures that align with the climate change mitigation and adaptation objectives of the EU’s taxonomy. Given the climate change mitigation objective’s alignment to the principles of the Paris Agreement, the disclosures provide a transparent view of the Group’s compatibility with the net zero goals of the economies we serve during the year ended 31 March 2022. Our assessment is presented within our RBR; please see page 53 of our RBR for the complete disclosure. We continually review our metrics and targets to ensure that the data we are measuring is meaningful, aligns with our strategy, and is providing the information the business and our stakeholders need to effectively monitor our performance and demonstrate our progress. In June 2022, we published our Climate Transition Plan alongside our RBR. Note, whilst we do not consider water use as a significant climate-related financial risk for the Group, performance metrics are contained in the RBR. Climate change metrics and targets We have metrics and targets that allow us to measure our impact on the environment, demonstrate our commitment and monitor our performance. These were published in October 2020 within our RBC and, on an annual basis, we report our progress against those targets in our RBR and our key metrics in respect of our GHG emissions can be found on page 26. We have a commitment to reduce our impact by achieving net zero for our Scope 1 and 2 emissions by 2050, with interim targets of an 80% reduction by 2030 and a 90% reduction by 2040, from a 1990 baseline. Alongside this, we have a Scope 3 emissions reduction target of a 37.5% reduction by FY 2034 from an FY 2019 baseline year. This target includes all of our Scope 3 emissions. Our GHG emissions reduction targets are science-based and approved by the SBTi. Numerous underlying metrics support and complement this goal as part of our broader sustainability ambition, including reducing our energy consumption, enhancing the natural value of our landholdings, recycling and/or reusing our recovered assets and reducing our office waste. These are discussed in more detail on page 67 and in our RBR. The metrics Measurement indicator Risk/Opportunity 2021/22 2020/21 Scope 1, 2 and 3 emissions and intensity1 1, 3, 6 See page 26 Consumer Trust Survey (US)1 1, 2 62.4% 66.2% NG UK’s transmission costs’ contribution to consumer bills1 2 £29.04 £29.52 NG UK’s distribution costs’ contribution to consumer bills1 2 £98.85 £95.81 US Electric: Average Customer Bill (Low Income Customers Excluded)1 2 $1,613.35 $1,563.14 US Gas: Average Customer Bill (Low Income Customers Excluded)1 2 $1,314.24 $1,156.45 US Electric: Average Low Income (only) Customer Bill1 2 $1,107.07 $1,026.82 US Gas: Average Low Income (only) Customer Bill1 2 $904.72 $771.56 Green Capex five-year forecast (2021/22-2025/26) 3 c.£24bn n/a (1st year of reporting) Network reliability1 4, 7 See page 26 NGP value creation 5 See page 55 Cumulative investments into large-scale renewables 5 See page 81 NGV capital investment 5 See page 25 Investment in R&D 5 See page 162 Gas UEL sensitivities 6 See page 181 Major storm costs 7 See page 39 1. Refer to RBR reporting methodology for calculation methodology: https://www.nationalgrid.com/responsibility/responsible-business-report Further, we are closely monitoring developments regarding the UK’s greening finance initiative, the formation of the ISSB and the proposals to deliver a comprehensive global baseline of sustainability-related disclosure standards. Whilst we currently leverage the GRI, SASB, EU Taxonomy, EEI and TCFD frameworks in our RBR to maximise the usefulness of our reporting, we are encouraged to see advancement to further align sustainability reporting disclosures. Please also refer to the RBR for the limited scope assurance opinion received over our most material sustainability metrics. A complete index of the quantitative measurement indicators used to manage each climate-related financial risk and opportunity is below: 83 S trateg ic R ep o rt National Grid plc Annual Report and Accounts 2021/22 17_TCFD_p70_83_v86.indd 83 27/05/2022 17:03

Governance at a glance 86 UK Corporate Governance Code 2021/22 – Compliance Statement 86 Chair’s statement 87 Our Board 88 – 89 Corporate Governance overview 90 – 98 People & Governance Committee report 99 – 100 Audit & Risk Committee report 101 – 105 Safety & Sustainability Committee report 106 Finance Committee report 107 Directors’ Remuneration report 108 – 131 Doing Right Now Transforming our network We are rewiring the Capital, reinforcing London’s electricity supply for decades to come. A six-year, £1 billion project in South London via 19 miles (30 kilometres) of deep underground tunnels. 84 National Grid plc Annual Report and Accounts 2021/22 18_Corp_Governance_and_Compliance_p84_98_v189.indd 84 27/05/2022 17:05

Corporate Governance Report C o rp o rate G o vernance 85National Grid plc Annual Report and Accounts 2021/22 18_Corp_Governance_and_Compliance_p84_98_v189.indd 85 27/05/2022 17:06

The Company is subject to the Principles and Provisions of the UK Corporate Governance Code (the ‘Code’), which it has applied consistently. The table below outlines how the Group has structured the Governance section of the Annual Report on the Principles of the Code. For the year ended 31 March 2022, the Board considers it has complied in full with the Provisions of the Code. This Corporate Governance report as a whole explains how the Company has applied the Principles and complied with the Provisions of the Code, but the below acts as a guide to where the most relevant explanations are given: Principles of the Code 1. Board leadership and company purpose Chair’s statement 87 Role of the Board 91 Section 172 statement 56 – 59 Purpose and values 65 Board engagement with stakeholders 96 – 97 Oversight of strategy 20 – 21 Assessment of risks and viability 28 – 35 Measurement of strategy (KPIs) 24 – 27 2. Division of responsibilities Board independence 88 – 90 Board Committees 91 Committee reports 99 – 110 Board attendance 90 External appointments of Board members 88 – 89 3. Composition, succession and evaluation Board biographies 88 – 89 Board composition and tenure 88 – 89 & 100 Committee membership 88 – 89 Board evaluation 97 Board succession planning 99 – 100 People & Governance Committee report 99 – 100 4. Audit, risk and internal controls Audit & Risk Committee report 101 – 105 Risk 28 – 32 Principal risks 28 – 32 Emerging risks 29 External auditor 104 – 105 Fair, balanced and understandable 101 Viability Statement 33 – 35 5. Remuneration Directors’ Remuneration report 108 – 131 Remuneration policy 113 & 124 – 128 98% 46% Board meeting attendance for the year ended 31 March 2022 female representation on our Board as at date of report 15% 66% ethnic minority representation on our Board as at date of report Average % of issued share capital voted at 2021 AGM 78% 50.97p employee engagement score for 2021/22 dividend per ordinary share in 2021/22 Increase of 3.7% on prior year 100 4 perfect score on Human Rights Campaign Foundation’s 2022 Corporate Equality Index Board members appointed in 2021/22 99% shareholder vote ‘For’ 2021 AGM resolution on climate change commitments and targets UK Corporate Governance Code – 2021/22 Compliance Statement 86 National Grid plc Annual Report and Accounts 2021/22 Key highlights Governance at a glance 18_Corp_Governance_and_Compliance_p84_98_v189.indd 86 27/05/2022 17:06

likely to face in the next several years. We asked ourselves, what topics would be worthy of the Board’s time? Why were they important? How would we get the most salient information? Which external and internal resources would be available to shape our perspectives? These questions may appear simplistic. But in my experience, effective stewardship starts by making sure that a board spends time on the matters that really count. I hope to use this report as a means to share with you some of the issues we are tackling in our Board discussions. None of the foregoing has any meaning unless we cast a critical eye on our own performance. We have adopted board goals and we retained an independent advisor to help us assess our group effectiveness as well as the effectiveness of each director; see page 97 for further detail. These honest conversations on how we are doing are foundational to our being the kind of board which you can entrust the stewardship of your Company. Board composition As you will have noted, several distinguished Board members reached the end of their terms in the year. Sir Peter Gershon, previous Board Chair until I assumed the role when he stepped down on 31 May 2021, is a distinguished businessman and advisor to government, known for his laser-like focus on productivity and performance. Dr. Paul Golby, a member of the Royal Academy of Engineering, has deep, relevant experience across the power sector, and contributed immeasurably to all the technical and strategy decisions the Company has made during his tenure. Mark Williamson, with a long career in finance, has wisely counselled on our financial and controls framework, as well as being the trusted Senior Independent Director, and Nicola Shaw, a key member of the management team in the role as UK Executive Director since 2016. All four retired from the Board in 2021. Jonathan Dawson, who will leave the Board at the AGM, has been the independent voice for the alignment of strategy and reward. In addition, Amanda Mesler, who has been a member of our Board for the last four years, has decided not to stand for re-election. Amanda was a great supporter of the investments in technology that have proved invaluable over these last several years. On behalf of my Board colleagues, I express my appreciation to all of them. Nevertheless, from this loss comes opportunity. We have been fortunate to have recruited five new directors who bring fresh perspectives and diverse experience to the Board. Ian Livingston, former Chief Executive of BT, comes with the battle scars of industry transformation and expertise in finance. Tony Wood, a sitting CEO and a member of the Royal Academy of Aeronautical Engineering, brings the perspective that safety, productivity and innovation are not to be traded off, but must be driven apace in lock-step. Martha Wyrsch has worked directly in the energy sector in all its aspects – power, natural gas, and renewables, regulated and unregulated. She brings wisdom and practical advice to the boardroom. Dear shareholders, I am pleased to present to you the 2021/22 Corporate Governance Report, my first as Chair of the Company. The year in review There has been no shortage of opportunities for engaged governance by the National Grid Board. The Company had a full agenda coming into the fiscal year: overseeing performance amidst a lingering pandemic and then the safe return to work; ensuring that our provision of service is consistent with society’s expectations of us; advancing our agenda of change as we make commitments to reach net zero; seeing through several major transactions; and supporting an evolving Group culture of accountability, agility and performance. The foregoing promised a busy year. Over the summer of 2021, a crisis in the retail energy markets in the UK began to unfold. Leading up to COP26, there were increasing pressures on both sides of the Atlantic for more rapid decarbonisation of energy. Then the threats of war became a stark reality. Ukraine was invaded and, almost overnight, energy supply security became the dominant theme. Our stakeholders have to be assured that we can identify and manage all of these risks. At the same time, we have to help balance aspirations regarding transformation with the exigencies of current delivery. All of these responsibilities are our job as board members, along with ensuring that we have a qualified, engaged, diverse workforce to succeed amidst an era of great change. My tenure as Chair commenced as directors were nearing or had completed their nine-year terms. Identifying suitable qualified replacements who could quickly come up to speed and yet bring fresh perspectives was essential. Fortunately, a well-vetted business plan was already in place and the change in board composition was orderly. We were able to quickly review Committee remits and composition and to refine the responsibilities and ownership of the Committees where much of the Board’s work is undertaken. Nevertheless, one thing I’ve observed in my years as a Non-executive Director is that operationally urgent matters can easily overtake consideration of truly important matters in a busy board agenda. So last summer, our Board took the time for what I believe was a critical set of conversations – namely coming to agreement on what were the big strategic questions that National Grid was Anne Robinson, an active executive in one of the largest asset management companies in the world, has substantial business and transactional experience and, in her current role, the most relevant background in ESG that we could imagine. Iain Mackay, who is joining the Board upon election at this AGM, is a sitting CFO with experience in industry prior to joining the fast-paced world of pharmaceuticals. These new Directors, along with those who continue to serve, bring strategic thoughtfulness, engagement, constructive challenge, independence and gravitas to our deliberations. As a group, they demonstrate our continued commitment to diversity on our Board and within National Grid’s organisation overall. Stakeholder engagement Whilst virtual engagement has become the norm over the past two years, it has been a great pleasure to resume in-person engagement in recent months. One can get an authentic sense of what is going on within an organisation or with society at large by meeting people, listening to how individuals and groups have fared, and seeing first-hand the challenges on the ground. In recent months, Board members have undertaken site visits. We have also had virtual and in-person engagement sessions throughout the year with employees. Page 96 provides more detail. Annual General Meeting Last year I was one of the many individuals affected by COVID-19 travel restrictions and was unable to participate in the 2021 AGM in person. Given the situation at the time, we did not encourage attendance by any shareholder. For our 2022 meeting, we revert to business as usual but with another option. I’m pleased to share that we are offering the opportunity for you to participate in a ‘hybrid AGM’. You will be able to join the meeting online and yet be able to participate in live voting and the Q&A session, as if you were in the room. Please note, too, that we are putting to vote for the first time our Climate Transition Plan this year. The discussion of this resolution should illuminate National Grid’s resolve to move to net zero and to provide metrics by which we can all track progress. Further details on this are outlined in the Notice of Meeting for the AGM and on the Company’s website. Looking forward Your Board will continue to focus on the key issues, challenge the Group’s leadership, and collectively seek to make wise decisions. In an ever-changing world, we pledge to you that whatever lies ahead, we have the best interests of your Company, its customers, and its people central to our deliberations. Paula Rosput Reynolds Chair 87 C o rp o rate G o vernance National Grid plc Annual Report and Accounts 2021/22 Chair’s statement 18_Corp_Governance_and_Compliance_p84_98_v189.indd 87 27/05/2022 17:07

Paula Rosput Reynolds (65) Chair Appointed: 1 January 2021 as Chair Designate and Chair with effect from 31 May 2021 Tenure: 1 year Skills and competencies: Paula’s strong business acumen is shown by her impressive track record of leading complex international businesses. In her board and leadership roles, Paula has demonstrated her decisive and pioneering nature, which will be crucial in moving National Grid’s vision forward, as it embarks on its journey to enable the clean-energy transition and net zero by 2050. Her knowledge of the energy market and experience supporting organisations through transitional periods is an asset to the Board, as National Grid continues to grow and embrace opportunities. Paula is Chair of the People & Governance Committee and the high- calibre appointments made under Paula’s leadership in the last year are pivotal in ensuring the succession and composition of the Board matches the culture, strategy and leadership needs of the Company. These skills combined with her insight into strategic and regulatory issues support her in leading and governing an effective board. External appointments: • Senior Independent Director and Chair of the Remuneration Committee at BP p.l.c. • Non-executive Director of General Electric • President and CEO of PreferWest LLC • Member of UK Prime Minister’s Business Council John Pettigrew FEI FIET (53) Chief Executive Appointed: 1 April 2014 and Chief Executive with effect from 1 April 2016 Tenure: 8 years Skills and competencies: John joined the Group as a graduate in 1991, progressing through many senior management roles and demonstrating a strong track record of developing and implementing global strategies for profitable growth. John contributes widely into external industry discussions shaping energy policy and brings significant know-how and commerciality to his leadership of the executive team and management of the Group’s businesses. John continues to lead the implementation of the Group’s strategy. This year he progressed the Company’s strategic pivot, including the integration of WPD and the successful sale of a majority stake in our UK Gas Transmission business. He also led the Company’s Principal Partnership of COP26 in Glasgow. External appointments: • Non-executive Director and Senior Independent Director of Rentokil Initial plc • Member of the UK Government’s Inclusive Economy Partnership • Member of the Electric Power Research Institute Board • Member of the CBI’s President’s Committee • Member of the Edison Electric Institute Executive Committee Ian Livingston (57) Non-executive Director; Independent Appointed: 1 August 2021 Tenure: Less than 1 year Skills and competencies: Ian is a chartered accountant who qualified with Arthur Andersen & Co and went on to become the youngest FTSE 100 CFO when appointed to the Dixons Group plc Board. Ian brings a wealth of experience to National Grid, having held both CFO and CEO positions in large, high-profile public companies operating in the UK and internationally. He has extensive experience of operating in a regulatory environment and is widely regarded in both the corporate and financial world for his record of consistently achieving enhanced shareholder value. Ian is Chair of the Remuneration Committee, where he brings significant experience and broad business perspective to discussions. He has a variety of non-commercial interests and involvement with a number of charities in education and social care. External appointments: • Chair of Currys plc (until 8 September 2022) • Non-executive Director of S&P Global Andy Agg (52) Chief Financial Officer (CFO) Appointed: 1 January 2019 Tenure: 3 years Skills and competencies: Andy trained and qualified as a chartered accountant with PwC and is a member of the ICAEW. He has significant financial experience, having held a number of senior finance leadership roles across the Group, including Group Financial Controller, UK CFO and Group Tax and Treasury Director. Andy brings in-depth knowledge of National Grid, in both the UK and the US, and has broad experience across operational and corporate finance roles. He contributes broadly on a wide range of topics at Board, Finance and Audit & Risk Committee meetings and has been instrumental in achieving the successful sale of a majority stake in our UK Gas Transmission business during the year. External appointments: • Member of The 100 Group Main Committee and Chair of the Tax Committee Liz Hewitt (65) Non-executive Director; Independent Appointed: 1 January 2020 Tenure: 2 years Skills and competencies: Liz qualified as a chartered accountant with Arthur Andersen & Co. In her executive career she worked in private equity for 3i Group plc, Gartmore Investment Management Limited and Citicorp Venture Capital Ltd gaining insights into a wide variety of industries. Her work at Smith & Nephew gave her global insight. She was seconded for a year to HM Government. Liz has extensive experience as an audit committee chair and as a member of nominations and remuneration committees. She is considered to be a financial expert in the context of audit committee work. Her broad industrial and global experience and her financial knowledge bring a wide perspective to her role as Chair of the Audit & Risk Committee and in Board discussions and decision-making. External appointments: • Director of Silverwood Property Limited • Non-executive Director of St George’s Fields Limited; and of St George’s Fields No.2 Limited FA AR P E F E Justine Campbell (51) Group General Counsel & Company Secretary Appointed: 1 January 2021 Tenure: 1 year Skills and competencies: Justine trained and qualified as a lawyer at Freshfields in London and Brussels. She has held senior executive positions at several multi-national companies and is an experienced lawyer with particular expertise in regulated sectors. She is responsible for safety, legal, risk, compliance and governance activities across the Group, the effective operating of National Grid plc’s Board and Committees and advising on key issues of corporate governance. External appointment: • Member of the GC100 Group Executive Committee FE Jonathan Dawson (70) Non-executive Director; Independent Appointed: 4 March 2013 Tenure: 9 years Skills and competencies: Jonathan, through his broad range of expertise within the finance and pensions sector, brings significant in-depth understanding in remuneration and financial matters to the Group. Jonathan previously held positions as Chairman of the Remuneration Committee and Senior Independent Director of Next plc and Chairman of the Audit & Risk Committee and Senior Independent Director at Jardine Lloyd Thompson Group plc. As a Non-executive Director, Jonathan brings an innovative perspective, scrutiny, constructive challenge and independent oversight to the Board. External appointments: • Chairman of River and Mercantile Group plc • Chairman and a founding partner of Penfida Ltd R F Thérèse Esperdy (61) Non-executive Director and Senior Independent Director; Independent Appointed: 18 March 2014 Tenure: 8 years Skills and competencies: Thérèse has significant international investment banking experience, having held a variety of leadership roles spanning 27 years. Her career began at Lehman Brothers and in 1997 she joined Chase Securities and subsequently JPMorgan Chase & Co, where she held a number of senior positions. With a distinguished career in the investment banking sector, Thérèse brings significant banking, strategic and international financial management expertise and knowledge of financial markets to the Board and to her role as Chair of the Finance Committee. Thérèse’s specialist knowledge combined with her sharp and incisive thinking enables her to contribute to, and constructively challenge on, a wide range of Board debates. External appointments: • Chair of Imperial Brands PLC • Non-executive Director of Moody’s Corporation AF P Group General Counsel & Company Secretary 88 National

Grid plc Annual Report and Accounts 2021/22 Our Board 18_Corp_Governance_and_Compliance_p84_98_v189.indd 88 27/05/2022 17:09

Key A Audit & Risk Committee F Finance Committee P People & Governance Committee R Remuneration Committee S Safety & Sustainability Committee E Group Executive Committee Committee Chair Other changes during the year: Sir Peter Gershon, Paul Golby and Mark Williamson stepped down as Non-executive Directors on 31 May 2021, 26 July 2021 and 31 December 2021 respectively. Nicola Shaw stepped down as Executive Director on 26 July 2021. Biographies as at 18 May 2022 Amanda Mesler (58) Non-executive Director; Independent Appointed: 17 May 2018 Tenure: 4 years Skills and competencies: Amanda brings to the Group extensive international leadership and general management experience from the technology and fintech sectors. She has over 27 years of experience at senior management and board level at large international companies. She led a $1 billion global practice at Electronic Data Services and has experience sitting on audit, risk and remuneration committees. Amanda provides an entrepreneurial perspective to the Board and valuable insight into the Company’s increasingly important technical evolution. External appointments: • Non-executive Director of Amadeus IT Group S.A. • Chair of Minna Technologies • Advisor to Macquarie Capital Anne Robinson (51) Non-executive Director; Independent Appointed: 19 January 2022 Tenure: Less than 1 year Skills and competencies: Anne has over 20 years of legal experience in the financial services industry, where she has counselled senior executives on a wide range of legal, regulatory and business issues. Anne has worked throughout her career to champion diversity, equity and inclusion whilst being a strong advocate for sponsorship and mentorship of other women in the legal profession. Anne brings to the Board expansive and varied legal experience in the financial services and consulting fields as well as experience of working closely with boards and investors on a broad range of ESG issues. Anne earned a BS from Hampton University and a JD from Columbia University Law School. External appointments: • Managing Director, General Counsel, and Corporate Secretary of Vanguard • Director of Minority Corporate Counsel Association • Director of Children’s Rights • Millstein Center Advisory Board at Columbia Law School Martha Wyrsch (64) Non-executive Director; Independent Appointed: 1 September 2021 Tenure: Less than 1 year Skills and competencies: Martha has held a number of senior positions in the energy industry and has significant experience of the US market, having been a Fortune 100 General Counsel and CEO of a major international gas-transmission business, as well as leading the growth and development of Vestas’ renewables business in the US. As an accomplished director for publicly listed companies, in both the UK and the US, Martha brings to the Board relevant experience across the renewable energy sector, as well as a strong understanding of the US regulatory environment, bringing enriching discussion and strategic thought to the Board. External appointments: • Independent Director of Quanta Services, Inc. • Independent Director of First American Financial Corp. • Advisor to Summit Carbon Solutions Earl Shipp (64) Non-executive Director; Independent Appointed: 1 January 2019 Tenure: 3 years Skills and competencies: With an extensive career in the chemicals industry and having held a senior leadership role in a safety-critical process environment, Earl brings significant safety, project management, environmental, sustainability and strategic expertise to the Board and its Committees, particularly in relation to safety management. This, along with his innovative way of thinking, enables Earl to contribute on a wide range of issues to Board and Committee debates and to effectively chair the Safety & Sustainability Committee. External appointments: • Non-executive Director of Olin Corporation • Non-executive Director of Great Lakes Dredge and Dock Co. Jonathan Silver (64) Non-executive Director; Independent Appointed: 16 May 2019 Tenure: 3 years Skills and competencies: Jonathan has considerable knowledge of the US-regulated energy environment, experience and understanding of integrating public policy and technology into a utility as well as a strong background in finance. Previously, Jonathan was the head of the US government’s $40 billion clean energy investment fund. Jonathan’s strong background in finance and government policy along with his long career at the intersection of policy, technology, finance, and energy brings innovative and positive insight to the Board’s policy discussions and to its interaction with management. External appointments: • Independent Director of EG Acquisition Corp. • Senior Advisor to Guggenheim Partners • Director of Plug Power Inc. • Director of Intellihot Inc. Tony Wood (56) Non-executive Director; Independent Appointed: 1 September 2021 Tenure: Less than 1 year Skills and competencies: Tony has proven business leadership credentials as an experienced CEO, and brings to the Board significant engineering experience. He is currently CEO of Meggitt plc and has led the operational and cultural transformation of the company, transitioning from an industrial holding structure to a focused and customer-led business, leveraging technology investment. Tony also held the position of President of the aerospace division at Rolls-Royce, during which time he developed a strong reputation as an operator, turning around and growing several challenging business units and internationalising the company’s footprint. External appointments: • CEO of Meggitt PLC • Director of ADS Group Limited R SP SA P A R S S P 89 C o rp o rate G o vernance National Grid plc Annual Report and Accounts 2021/22 18_Corp_Governance_and_Compliance_p84_98_v189.indd 89 27/05/2022 17:11

Governance refresh We reviewed our governance framework during the year to more closely align with National Grid’s purpose, vision and values following the strategic repositioning of the Company’s portfolio, the continued refreshment of the Board and to better facilitate us to progress our sustainability and climate change agenda. All Committee changes were effective 1 September 2021. Committees: The Safety & Sustainability Committee (previously the Safety, Environment & Health Committee) expanded its remit to increase focus on sustainability strategy and related external disclosures. This allows the Committee to have the in-depth discussions required on these topics with Board members best placed to provide insight and overview, enabling the Committee to review specific safety- and sustainability- related risks and providing a greater oversight of related Group Principal Risks. The Committee report is on page 106. The Audit & Risk Committee (previously the Audit Committee) repositioned to give a greater focus to risk with increased time now spent reviewing principal, emerging and child risks in relation to the Company’s risk management and controls processes. The Committee report is on page 101. The People & Governance Committee (previously the Nominations Committee) expanded its remit to focus further on wider succession within the organisation as well as core governance issues such as the workforce engagement programme for the year. The Committee report is on page 99. All Committee compositions were reviewed and revised to ensure a suitable spread of skills and experience that complement the revised remit of our Committees, details of which can be found in each Committee report. Governance processes: our review extended to refreshing the Board Governance document to ensure this reflected the wider Committee remits and clear Chair and CEO roles. We moved from eight scheduled Board meetings annually to six meetings made possible through reviewing our cadence of reporting and Board pack materials with an efficiency programme introduced to ensure that reporting is as effective and concise as possible. This allows greater time at Board meetings to focus on goals, priorities and strategic topics, enabling quality discussion to deliver our strategy. The Board will continue to review its framework annually to satisfy itself that it continues to be best aligned to the Company’s purpose and strategy. Group Executive Committee: supports the CEO’s decision making. To do this, the roles of the overall Committee and supporting sub-committees were refreshed to provide a more optimal way to communicate and understand key business information – specifically, having the right people discussing the most relevant topics in the sub-committees, enabling better decision making at the top of the organisation. Board composition and roles Our Board comprises of a Non-executive Chair (independent on appointment), two Executive Directors (CEO and CFO), and 10 independent Non-executive Directors, as at the date of this report. There is a clear division of responsibilities between the Chair and CEO, reflected in the Board Governance document available on our website. A list of our Directors’ biographies can be found on pages 88 and 89. Our Chair sets Board meeting agendas and ensures the Board receives accurate, timely and clear information to monitor, challenge, guide and take sound decisions. She is responsible for promoting a culture of open debate between Executive and Non-executive Directors. Our Chair also facilitates effective communication with shareholders and other stakeholders and promotes high standards of corporate governance, ensuring Directors understand the views of the Company’s shareholders and other key stakeholders, and their duties under section 172 of the Companies Act. Our Chief Executive is responsible for the executive leadership and day-to-day management of the Company, to ensure the delivery of the strategy agreed by the Board. Our Chief Financial Officer is responsible for providing strategic financial leadership to the Company and for the day-to-day management of the finance function. Our independent Non-executive Directors are responsible for contributing sound judgement and objectivity to Board deliberations and the overall decision-making process, providing constructive challenge, and monitoring the Executive Directors’ delivery of the strategy within the Board’s risk and governance structure. Our Senior Independent Director provides a sounding board for the Chair and serves as a trusted intermediary for the other Directors, as well as shareholders, as required. She meets with the Non-executive Directors (without the Chair present) when necessary and at least once a year to appraise the Chair’s performance and communicates the results to the Chair and People & Governance Committee. Our Group General Counsel & Company Secretary has responsibility for ensuring the effectiveness of the Company’s governance framework. All Directors have access to her advice. Independence and time commitment We monitor and note potential conflicts of interest that each Director may have and recommend to the Board whether these should be authorised and if any conditions should be attached to such authorisations. Directors are reminded regularly of their continuing obligations in relation to conflicts and review and confirm their external interests at least annually. This is then used to consider whether each Director continues to be independent. Following due consideration, the Board determined that all Non-executive Directors continued to be effective and independent in both character and judgement in their roles. The table below sets out Director attendance at Board meetings during the year to 31 March 2022. Director Attendance Director Attendance Director Attendance Paula Rosput Reynolds 10/10 Ian Livingston 5/52 Martha Wyrsch 4/42 John Pettigrew 10/10 Amanda Mesler 10/10 Former Director Andy Agg 10/10 Anne Robinson 2/22 Sir Peter Gershon 2/23 Jonathan Dawson 10/10 Earl Shipp 9/101 Nicola Shaw 4/43 Thérèse Esperdy 10/10 Jonathan Silver 9/101 Paul Golby 4/43 Liz Hewitt 9/101 Tony Wood 4/42 Mark Williamson 8/83 Board Chair 1. The Directors noted were unable to join due to conflicting commitments. The meetings in question were ad hoc and scheduled at short notice. Where possible, all Board members who were unable to attend a meeting provided comments to the Chair in advance of the meeting. 2. The Directors noted were appointed during the year and the attendance is based on available meetings from appointment. 3. The Directors noted resigned during the year and the attendance is based on available meetings before resignation. 90 National Grid plc Annual Report and Accounts 2021/22 Corporate Governance overview Our governance framework 18_Corp_Governance_and_Compliance_p84_98_v189.indd 90 27/05/2022 17:11

Board of Directors To operate efficiently and give the right level of attention and consideration to relevant matters, the Board delegates authority to its Board Committees. Each Committee Chair reports to the Board on their Committee’s activities after each meeting. Key matters considered by the Board include: • establishing the organisation’s vision, mission and purpose; • the Company’s strategy and long-term strategic objectives; • risk appetite and determination of Group Principal Risks; • overall corporate governance arrangements; • systems of internal control and risk management; • ensuring legal compliance and ethical integrity; • annual business plan and budget; • significant changes in capital structure; • ensuring the Company has adequate resources and that resources are managed responsibly; • succession planning for Board and senior management; • half-year and full-year results statements, Annual Report and Accounts and other statutory announcements; • oversight of the Company’s response to major crises and other significant challenges; • oversight of material ESG issues; • recruiting new Board members and assessing Board performance; • enhancing the organisation’s public standing and; • determination of the framework or policy for the remuneration of the Chair, Chief Executive, Executive Directors, Group General Counsel & Company Secretary, and direct reports to the Chief Executive, following recommendation from the Remuneration Committee. Group Executive Committee • Oversees the safety, operational and financial performance of the Company. It is responsible for making the day-to-day management and operational decisions it considers necessary to safeguard the interests of the Company and to further the strategy, business objectives and targets established by the Board. • Delegates authority to a number of sub-committees. • Members have a broad range of skills and expertise that are updated through training and development. Some also hold external non- executive directorships, giving them valuable board experience. Those members of the Committee who are not directors regularly attend Board and Committee meetings for specific agenda items. Remuneration Committee • Consideration and implementation of Remuneration Policy. • Consideration and exercise of discretion. • Incentive design and setting of targets. Sub-committees and other management committees Safety, Health & Sustainability Executive Sub-Committee; Ethics, Risk & Compliance Executive Sub-Committee; Reputation & Stakeholder Executive Sub-Committee; Policy & Regulation Executive Sub-Committee; Investment Committee; Disclosure Committee; Employee Share Schemes Sub-Committee. People & Governance Committee • Board and Committee composition. • Succession planning. • Board appointments. • Workforce engagement. Audit & Risk Committee • Financial reporting. • Internal controls, risk management and external compliance. • Corporate audit. • External audit and assurance. • ESG and climate change related disclosures. Finance Committee • Financing policies and decisions. • Credit exposure. • Hedging. • Foreign exchange transactions. • Tax strategy and policy. • Guarantees and indemnities. Safety & Sustainability Committee • Safety, health and sustainability strategy and policies. • Performance targets. • ESG and climate change- related targets, disclosures and action plans. How the Board operates Board and Committees Our Group Executive Committee Two Executive Directors are members of the Group Executive Committee, as well as being on the Board. The Group General Counsel & Company Secretary is also a member of the Group Executive Committee. See their biographies on page 88 – 89. Full biographies for the Group Executive Committee are available at: nationalgrid.com Governance structure The schedule of matters reserved for the Board and terms of reference for each Board Committee are available in our Board Governance Document at: nationalgrid.com Reports from each of the Board Committees, together with details of their activities, are set out on pages 99 – 131. 91 C o rp o rate G o vernance National Grid plc Annual Report and Accounts 2021/22 18_Corp_Governance_and_Compliance_p84_98_v189.indd 91 27/05/2022 17:11

Board focus during the year Our Board is collectively responsible for the effective oversight of the Company and its businesses. It determines the Company’s strategic direction and objectives, business plan, dividend policy, viability and governance structure to help achieve long-term success and deliver sustainable shareholder value. The Board also plays a major role in setting and leading the Company’s culture and wider sustainability goals. It considers key stakeholders in its decision making and, in doing so, ensures that Directors comply with their duty under section 172 of the Companies Act 2006. Our stakeholders considered in Board discussions Key matters considered Outcome Strategy Oversight and execution of several major strategic transactions Following the strategic pivot in the UK portfolio towards electricity with last year’s acquisition of WPD and the proposed sale of NECO and a majority stake in UK Gas Transmission, it was paramount that the Company continue to execute the current strategic pivot and transactions successfully. The Board maintained oversight of the transactions at every meeting and was updated on the progress of the integration of WPD into the Group and status of the NECO and UK Gas Transmission sales including key challenges and risks. In March 2022, the Board approved the delegation to a sub-committee to approve the transaction for the sale of a majority interest in UK Gas Transmission and our Metering business to a consortium comprised of Macquarie Asset Management and British Columbia Investment Management Corporation. In March 2022, the Board also approved the sale of National Grid’s interest in St William Homes LLP, to its joint venture partner, The Berkeley Group plc. Strategic priorities and Board performance With the addition of new Board members and the dynamic external environment, the Board established an agenda to review each business unit to understand its current performance, regulatory structure, financial framework, culture and our future strategy. The Board deliberated how to spend its time throughout the year by identifying key areas for strategic discussion. The Board set goals for itself to ensure clarity of direction at every meeting. External insights were also provided throughout the year: • the Board heard from an expert in UK energy policy and discussed the challenges of the energy transition; • the Chief Economist at bp plc provided energy forecasts and insights on the energy transition; and • the CEO of Tennet (a leading European electricity transmission system operator) gave perspectives on the opportunities associated with developing offshore transmission in the UK and North West Europe. The Board also met with the New York Independent System Operator, the Chair and CEO of Ofgem, and the representatives of the business community in New York to discuss key issues, challenges and to hear their perspectives. The Board were also briefed by brokers in the year. Our commitment to reach net zero In the year, the Board discussed ESG matters, including key strategic enhancements to keep pace with stakeholder expectations and to be aligned with commitments as a responsible business. The Safety & Sustainability Committee and the Audit & Risk Committee reviewed climate change reporting disclosures, within their respective remits. The Board approved the Climate Transition Plan in May 2022 – ahead of the 2022 AGM. See the Remuneration Committee report on how we have linked ESG to Director remuneration at page 108. Enrichment sessions Outside of Board meetings, Directors joined additional sessions with our Strategy team to learn more on emerging topics including heat pump technology, CCUS and prospects for hydrogen. The Board also met out of cycle in April 2022 for a focused session looking at the disclosures required by the Company in relation to ESG. The Board also received a briefing on key energy policy announcements and energy security decisions being made in the UK. Colleagues Investors Regulators Communities Customers Suppliers 92 National Grid plc Annual Report and Accounts 2021/22 Corporate Governance overview continued 18_Corp_Governance_and_Compliance_p84_98_v189.indd 92 27/05/2022 17:11

Key matters considered Outcome Business Plan and financial performance Aligning the Strategic Business Plan and budget to the strategy In the year, the Board discussed and approved the Strategic Business Plan, to promote alignment of financial performance and strategy. It further reviewed a five-year view of the Group which incorporated portfolio changes. In June 2021, the Board received the budget revision, reflecting the impact of portfolio changes and the changes to the operating model on the Group’s targets. Dividend Since approval in January 2021, it was agreed that from FY21/22 the Company would seek to grow the dividend in line with CPIH, reflecting a move from RPI to CPIH in the UK regulated businesses. The Board considered the dividend policy at its November 2021 and May 2022 meetings and approved the proposed interim and final dividend payments. RIIO-T2 financial structure During the year, the Board reviewed the RIIO-T2 framework and how the Company will align its approach to operations given the change in regulatory incentives. Following the acquisition of WPD, the Board discussed and approved the RIIO-ED2 business plan for submission in December 2021 and received updates on the ongoing process. Political and regulatory environment Impacts on the UK energy market Throughout the year, the Board was updated on the disruption in the UK market as retail suppliers began to fail and how National Grid was responding. In early 2022, the Board was briefed on how the crisis in Ukraine could potentially affect the UK and the wider energy environment. As the conflict continued, the Board continued to be briefed on the significant impacts on the UK energy market, including the high and volatile prices, impact on consumers and direct impacts on the Company. The Board continued to have oversight of the impact on affordability and UK Security of Supply, cyber security and potential cost recovery. UK RIIO-T2 price control During the year, regular updates were provided on the RIIO-T2 price control appeal process and the holistic five-year strategy to deliver RIIO-T2 in ET. Early in the year, the Board challenged the Company’s response to the provisional determinations and following the submission of a technical appeal to the Competition and Markets Authority (CMA) around the RIIO-T2 cost of equity and outperformance wedge; the CMA found in favour of our arguments on the outperformance wedge. US The Board reviewed the current US regulatory structure, including the current regulatory and financial frameworks in place and core components of the US regulatory framework and the performance profile of the US business. Twice in 2021, the Board met with the Monitor who was overseeing gas capacity planning for New York. The Board reviewed the Long Term Capacity Report; the Company is compliant with the terms of settlement. The Board discussed the stakeholder engagement plan and key challenges and risks going forward. The Board noted the rate case agreements that had been completed for KEDNY, KEDLI and NMPC, and noted the filing of a plan with the Massachusetts Department of Public Utilities. 93 C o rp o rate G o vernance National Grid plc Annual Report and Accounts 2021/22 18_Corp_Governance_and_Compliance_p84_98_v189.indd 93 27/05/2022 17:11

Key matters considered Outcome People and culture Evolution of the Group culture of accountability, agility and performance The Board is responsible for monitoring and assessing both the culture of the Group and its alignment with the Company’s purpose, values and strategy. These elements are vital to our long-term success as a Company, as the availability of resources and operating procedures require Board engagement inside and outside of the boardroom. You can read more about how the Board monitors culture on page 95. Risk Review and approval of Group Principal Risks and emerging risks During the year, the Board completed a review of the Company’s risk appetite, principal risks and emerging risks and how we manage them. It was agreed to retire the disruptive forces risk and de-escalate the data management risk. In May 2022, the Board reviewed and approved the effectiveness of the Group’s risk management system, following updates in the year from the Audit & Risk Committee and the Safety & Sustainability Committee on focused risks within their remit. You can read more about our risks on pages 28 – 32. Governance Refreshing our governance framework With so much change within the business and the rapidly changing external landscape, the Board reviewed the entire governance framework to ensure it remained fit for purpose. Committee composition and remit were refreshed and refined. You can read more about this on page 90. The Board will continue its focus on the strategic priorities, including monitoring the actions, milestones and timelines to deliver the strategy. We will continue using enrichment sessions outside of the regularly scheduled Board meetings to deepen the Board’s working knowledge on selected topics. All Board members will also continue to undertake site visits to see the work of National Grid for themselves. Looking forward: 94 National Grid plc Annual Report and Accounts 2021/22 Corporate Governance overview continued 18_Corp_Governance_and_Compliance_p84_98_v189.indd 94 27/05/2022 17:11

Members of the Board visited the IFA interconnector site at Sellindge in March 2022. Following a catastrophic fire at the site in September 2021, the Board and Committees have had oversight of the investigation into the root cause. The site visit consisted of a tour of the facility and an overview of the damage and reparations. It also provided the opportunity for Board members to hear directly from employees and contractors on site. For further information on culture, please see page 65. The Board plays a significant role in monitoring and assessing both the culture of the Group and its alignment with the Company’s purpose, values and strategy. The People & Governance Committee also plays a key role in keeping momentum in relation to management development and succession. This year, focus has been on executive development in particular. Although not all Board members sit on the People & Governance Committee, they have access to all Committee papers and regularly attend the People & Governance Committee meetings. The Chair reports back to the full Board following each meeting, which also provides the opportunity for full Board input and to ensure it is monitoring culture effectively. There has been a vast amount of change both within the organisation and externally over the last few years. The importance of creating the right culture throughout the Company, to ensure our colleagues are embracing positive and inclusive behaviours and values in everything we do, has never been more important. The Board assesses the Company’s culture and the progress being made from two key data sources: • lagging indicators from the Grid:voice survey and the Spencer Stuart culture diagnostic; and • leading indicators taken from the culture change activity underway across the organisation. The full Board joined the People & Governance Committee to discuss with Spencer Stuart matters including the context, backgrounds and updates to the work that the Company had been undertaking to identify and cultivate senior talent. The full Board reviewed the assessments undertaken against the methodology used to assess the talent pipelines. Grid:voice employee survey Our Grid:voice survey this year provided a set of strong results, with improvements in a number of areas including the ‘Safe to Say’ scores, which are six points higher than the high performing norm. This has demonstrated that there is an open culture within the organisation where individuals feel that they are able to express their views, opinions and concerns. The Board also monitors areas that are not as strong performing as others and tracks progress. Consideration in the year was also given to WPD’s results, the first year that these had been included. There is focus required in this area to work to align the results with the rest of the organisation and the Board will monitor to ensure progress is achieved. Leading indicators of change In addition to the quantitative data, the Board also monitors leading indicators of change. Throughout the year this has been through the results of the organisation’s ‘Living our Values Everyday’ campaign, ‘Untapped AI’ personal development coaching activity and through the ‘Team Effectiveness’ facilitation programme. Looking forward Our culture diagnostic work will continue to progress with the next goal in this area to move the characteristics of ‘Results’ further up and move ‘Order’ down. The challenge will be to maintain the changes made around ‘Purpose’ and ‘Caution’, whilst focusing organisation-wide and everyday action change on becoming more ‘Customer’ and ‘Performance’ orientated. The Board will continue to spend considerable time on culture and monitor the progress in this area. One of the Board’s goals for 2022/23 is to ensure laser-like focus is on management succession, including a focus on continuous culture improvement. The biggest impact on colleague engagement and culture is line managers and the tone that is set from the top of the organisation. Recognising this, the Company’s ‘leadership index’ sets expectations for leadership behaviour, and provides actionable insight for leaders to focus development that has a positive impact on their immediate team. 2022 was the third full ‘leadership index’ that has been created and demonstrated positive progress with a reduction in the number of leaders scoring below our target levels. This has highlighted the positive and significant impact our individual leaders across the organisation can have on their own behaviour. Culture diagnostic The culture diagnostic work has shown a clear shift towards our desired culture and in particular indicated that the characteristic of ‘Caution’ had moved downwards and ‘Purpose’ had moved upwards, demonstrating a significant step forward over the last 12 months. The strongest culture traits for the Group are now ‘Purpose’, ‘Caring’ and ‘Order’. 95 C o rp o rate G o vernance National Grid plc Annual Report and Accounts 2021/22 How the Board monitors culture 18_Corp_Governance_and_Compliance_p84_98_v189.indd 95 27/05/2022 17:11

Workforce engagement Throughout the year we continued with our ‘Full Board Employee Voice’ approach, utilising and enhancing existing colleague engagement methods and communication channels to ensure meaningful engagement across all locations. The programme, overseen by the People & Governance Committee, monitors the effectiveness of the programme and reviews the chosen mechanism under the Code at least annually. The variety of engagement is a great way of building and maintaining trust and communication whilst providing our people with an appropriate forum to influence change. In the year we shared a selection of short videos of our new Non-executive Directors with our colleagues to help familiarise them with their Board. Board engagement programme Small sessions These sessions make up the majority of the Board engagement programme in the year. They consist of around 10 individuals in attendance and a different subset of Board members. Attendees are coordinated by HR and are diverse across our workforce. Some of the sessions are open discussion with no set agenda whilst others have recommended topics; for example, in May 2022, our employees discussed our Climate Transition Plan and the new Remuneration Policy ahead of these going to the AGM for shareholder vote. Employee Resource Groups (ERG) and high-potential employees The Chair met with multiple ERG leads and participated in a ‘learning from leaders’ session with the ‘Women in National Grid’ (WING) ERG. Our high-potential employees also had the opportunity to meet with the Board and share their views. This was a great opportunity for the Board to meet our high-potential employees informally and reconfirmed the need to actively support their career development, a topic very much on the People & Governance Committee’s agenda for the year ahead. Virtual ‘town hall’ Our Chair and CEO hosted a virtual town hall in January 2022 with a cross-section of the US workforce. Discussions included community engagement, diversity and inclusion, the clean energy transition and gas supply. This was one of the first opportunities for some of our colleagues to meet our Chair since she had been in role. Committee focused These included an Audit & Risk Committee virtual session in January 2022 with US finance colleagues and a Finance Committee discussion with colleagues from the Pension, Tax, Financial Planning and Treasury teams in July 2021. Engineering dinner Earl Shipp and Tony Wood attended a dinner in March 2022 to recognise engineers involved in world-leading Energy Transition projects including T-Pylons, the UK’s new nuclear power station and the Storm Eunice response. The event provided the opportunity for individuals to discuss a range of topics including SF6, engineering capability and the strategic direction taken by the Board. Site visits It was really positive for Directors to be able to get back out on site following the COVID-19 pandemic, and this year saw optional visits scheduled around Board meetings. These vital engagement forums provided the opportunity for smaller groups of the Board to hear views from and see the workforce in action and included the IFA interconnector at Sellindge, the London Power Tunnels and WPD’s control centre. Feedback and decision making Following all engagement, the Board takes the time to discuss the views of the workforce and takes these into consideration throughout wider Board discussions, a topic on each Board agenda going forward. Following feedback in the external Board evaluation this year, a set of ‘ground rules’ were re-established by the Board to increase transparency around engagement and to ensure that following any non-scheduled engagement events, views heard are captured and reported back to the boardroom or the CEO/CFO, where appropriate. Looking ahead The People & Governance Committee reviewed the engagement mechanism at its March 2022 meeting and agreed that the current approach remained the most appropriate mechanism. The variety of sessions provides a valuable link between our colleagues and the Directors, and we look forward to hearing more from our employees this year. As the world and priorities continue to evolve, we will continue to keep the overall approach under review and updated and refined as required. Engagement is key to the Group’s long-term success and the Board directly and indirectly engages with key stakeholders, ensuring it understands their interests and takes them into account in Board decision making. You can read the Board’s section 172(1) statement on page 56. Shareholder engagement The Board is committed to maintaining good communications with existing and potential shareholders. The Company has a comprehensive investor relations programme where a range of key investors are met with in person or virtually at small meetings and larger investor roadshow events. The Board Chair also engages with large shareholders and the Remuneration Committee Chair engages specifically on remuneration practices. Management also hosts webcasts for both our half-year and full-year results and takes questions from investors and analysts to ensure an open dialogue with the market. Presentations given to analysts and investors covering the Group’s results, along with all results and other regulatory announcements as well as further information for investors, are included on the investor relations section of our website at nationalgrid.com/investors. Further information on our engagement with our retail shareholders is set out on page 97 under Annual and General Meetings of shareholders. Capital Markets Day In November 2021 we hosted our first Capital Markets Day. This was a hybrid event giving investors the opportunity to engage online or in person with key members of the Group Executive Committee and National Grid leaders. As part of this, we held a number of ‘teach in’ sessions to support investors’ knowledge of our business units and key strategy areas for the Group. The Capital Markets Day videos are on our website at nationalgrid.com/investors. ‘Grid Guide to...’ Throughout the year our investor series continued. The series consists of short, virtual sessions covering our ambitions and progress across a range of ESG themes. Some of the key sessions of the 2021/22 programme included: • May 2021 – Grid Guide to... Our People; • July 2021 – Grid Guide to... the Decarbonisation of Transport; • October 2021 – Grid Guide to... the Future of Heat in downstate New York; and • March 2022 – Grid Guide to... National Grid’s Sustainable Supply Chain. 96 National Grid plc Annual Report and Accounts 2021/22 Board engagement Corporate Governance overview continued 18_Corp_Governance_and_Compliance_p84_98_v189.indd 96 27/05/2022 17:11

Annual and General Meetings of shareholders In April 2021, we held a General Meeting to seek approval from our shareholders for the acquisition of WPD. We also announced our intention to sell a majority stake in UK Gas Transmission and the sale of NECO at this time. This meeting took place behind closed doors due to COVID-19 restrictions; however, shareholders were invited to submit questions in advance of the meeting and were answered in a shareholder webcast. In July 2021, our Annual General Meeting (AGM) took place in London. We also facilitated the ability for shareholders to view the meeting remotely, register and ask any questions both in person or virtually. Voting levels were largely consistent with previous years, despite the disruption caused by COVID-19 restrictions in place. All resolutions were passed at the meeting in line with the Board’s recommendations. The pandemic has clearly demonstrated the efficiency of virtual and hybrid meetings and allows for greater levels of engagement and participation by individuals. A resolution to amend our Articles of Association to allow for hybrid AGMs was approved in 2021. Our 2022 AGM in July will be conducted in the hybrid format. The Notice convening the 2022 AGM will be made available to shareholders in advance of the meeting. This will provide shareholders with the appropriate time to consider matters. The results of the proxy votes on each resolution will be collated independently by the Company’s registrar and will be published on the Company’s website after the meeting. Looking forward We maintain a comprehensive investor relations programme throughout the year. Please visit our website to keep up to date as events are announced at nationalgrid.com/investors. Materials from recent seminars and access to our educational videos and podcasts can also be found online and on our social media channels. Performance evaluation 2021/22 external Board evaluation Our annual evaluation provides the Board and its Committees with an opportunity to consider and reflect on the quality and effectiveness of their decision making, and for each member to consider their own contribution and performance. In accordance with the Code, which outlines in the Provisions that the Company should undertake an externally facilitated evaluation every three years, the 2021/22 Board evaluation was conducted externally. In May 2021, National Grid engaged Independent Board Evaluation (IBE) to facilitate this year’s Board evaluation. Following initial briefings in October 2021, the evaluation began with Board and Committee observations in November 2021. This was supplemented with Director and management interviews. Results were fed back to the Chair in December 2021 and then presented to the Board in January 2022. The Board agreed the set of actions outlined below in March 2022. National Grid confirms neither the principal consultant nor IBE has any connection with the Company, individual Directors nor the Company Secretary. Findings of the Board evaluation The Board has been through significant change over the past year, as noted in the evaluation. Findings of the evaluation take into account the appointment of a new Chair with effect from 31 May 2021 and a number of changes amongst the Non-executive Directors. The Board views these changes as positive. The review noted that National Grid is underpinned by robust governance and compliance. Succession planning, culture and strategy were identified as key areas of focus for the year ahead, with opportunity for Board materials to be further streamlined. Board Committees’ effectiveness Each Board Committee was included as part of the evaluation and each Committee received a detailed report. IBE noted that the Committee structure had also been through a period of change, which has refocused the remit of each Committee. The Chair has engaged on feedback with each Committee Chair and, following the Board agreeing its action plan and goals in March 2022, each Committee will set an outline of key areas of focus for 2022/23. Performance of the Chair As part of IBE’s evaluation, in line with the Code, each individual Director’s effectiveness was evaluated, including our Chair’s performance. Detailed feedback was shared directly with the Senior Independent Director, Thérèse Esperdy. An overview of the findings was shared during a private session between Thérèse and Paula. The Board recognised in its feedback that Paula had led the Board effectively during a period of significant change whilst outlining vital key strategic priorities for the business. Focus area Board actions for 2022/23 Strategy • Finalise Board strategic topics for 2022/23 and ensure agendas align. Capability • Strengthen focus on talent and succession at all levels. Include regular reviews on People & Governance agendas and align with opportunities for the Board to meet high-potential employees. Culture • Incorporate the results of the culture scorecard in People & Governance Committee deliberations. Employee engagement • Review and refine the overall approach to employee engagement. • Ensure key insights from engagement opportunities are shared with the Board. Engagement with management • Ensure effective communication flows to provide the right insights, including early sight of emerging issues when required. Process and meeting management • Continue to improve discipline around Board papers and processes. • Routinely bring outside views into the boardroom. ESG • Ensure that ESG commitments are embedded in the Board’s stewardship. 97 C o rp o rate G o vernance National Grid plc Annual Report and Accounts 2021/22 18_Corp_Governance_and_Compliance_p84_98_v189.indd 97 27/05/2022 17:11

Directors’ induction, development and training The Chair has overall responsibility for ensuring that our Non-executive Directors receive a comprehensive induction and suitable ongoing development and training. This is key to enabling Board effectiveness individually and as a whole. New directors receive comprehensive induction programmes and induction packs, tailored to their experience, background, committee membership and requirements of their role. They are encouraged to engage with the business by visiting key sites in the UK and US. As our internal and external business environment continues to change, it is important to ensure that Directors’ skills and knowledge are refreshed and updated regularly. During the year, Non-executive Directors attended a detailed session on digital initiatives across the Group ahead of a digital discussion at the Board meeting. The Board also had the opportunity to attend a series of enrichment sessions; topics presented through the year included heat pumps, CCUS, hydrogen and ESG. Further enrichment sessions are scheduled for 2022/23 on topics such as energy market reform, customer disruption and offshore wind market operations and projects. Significant focus was given to prepare Ian to step into the role of Chair of the Remuneration Committee from January 2022 alongside an introduction to the Group’s Remuneration Policy. Ian also received an overview of the Group’s strategy, key business operations and matters pertinent to the Audit & Risk Committee. Martha joined as a member of the Safety & Sustainability Committee and Remuneration Committee. Focus was given to key safety, sustainability and remuneration-related matters. In September 2021, Martha visited National Grid’s diversion site supporting HS2, gaining first-hand insight on the challenges the team faced during the project. On appointment, Anne joined as a member of the Safety & Sustainability Committee. Focus was given to key safety and sustainability matters alongside an overview of the Group and current strategy. Anne will also join the Remuneration Committee in July 2022 and will be undertaking sessions on remuneration. Tony joined as a member of the Safety & Sustainability and People & Governance Committees. Focus was given to key matters in relation to safety and sustainability alongside an overview of the Group. As part of his induction, Tony visited two key UK sites, Isle of Grain and London Power Tunnels, in August 2021. Ian Livingston Anne Robinson Martha Wyrsch Tony Wood Induction area Provided by Topics covered Attended by Governance and Director Duties Chair of the Board Group General Counsel & Company Secretary Head of Company Secretariat External Legal Counsel • Priority areas for the Board • Governance framework and corporate structure • Overall legal matters • Director duties for a listed company • Market Abuse Regulations IL AR MW TW Remuneration Committee Chair of the Remuneration Committee Chief People & Culture Officer Group Head of Reward External remuneration consultant (PwC) • Priority areas for the Remuneration Committee including Committee Chair succession • Remuneration Policy • Remuneration matters IL MW Audit & Risk Committee Chair of the Audit & Risk Committee Chief Financial Officer Group Head of Audit Chief Risk Officer Group Financial Controller External auditor (Deloitte) • Priority areas for the Audit & Risk Committee • Regulatory finance model • Financial reporting framework • Risk management framework and principal risks • External audit including lead partner succession IL Safety & Sustainability Committee Group Head of Safety Group Chief Engineer • Priority areas for the Safety & Sustainability Committee • National Grid’s approach to safety and sustainability • Engineering assurance • Climate change and climate risk AR MW TW Strategy Chief Strategy & External Affairs Officer Chief Sustainability Officer • National Grid’s strategy and transition to net zero • COP26 IL AR MW TW “ As such a large cohort of Directors has joined the Board during the year, it’s been crucial that we get them up to speed quickly. Our induction, development and training programme has been vital in supporting this.” Paula Rosput Reynolds 98 National Grid plc Annual Report and Accounts 2021/22 Corporate Governance overview continued 18_Corp_Governance_and_Compliance_p84_98_v189.indd 98 27/05/2022 17:12

emerging leaders, and to identify where we need to introduce new skills and experience into the organisation. In its first year, the Committee has focused on executive development in particular. However, we have also reviewed the results of the culture survey, reviewed the demographics of our workforce and turnover, and used our engagement sessions to learn more about the temperament and issues of the wider workforce. In line with our expanded remit, the Committee considered our workforce engagement mechanism and agreed to continue with our chosen method of enhancing existing Board engagement sessions. We discuss the learnings of these engagement sessions at every Board meeting, discussing whether we have the pulse of the organisation. We also have a schedule for the year to ensure we are meeting with organisations on both sides of the Atlantic, in offices, depots, and on the front line. At year end, the Committee considered whether these small and larger engagements remain appropriate and effective for us to stay in touch with all levels of the organisation and at this time we are agreed that they do; however, we will continue to challenge and review effectiveness in this area. See pages 96-97 for an overview of Board engagement activity through the year. Diversity, equity and inclusion (DEI) In 2021, the Company appointed its first senior executive with a remit specifically tied to diversity and inclusion. Natalie Edwards, our Global Chief Diversity Officer, has met with us to review the global DEI strategy, which includes a clear set of DEI commitments which will provide clarity and direction for the organisation. The work of the team in engaging with the workforce has been exemplary and we anticipate having Natalie meet with us frequently given the importance of this agenda. We also welcome the FCA’s new listing rule requirements around diversity and inclusion reporting. These will apply for our next year’s report; however I’m happy to report that we are already in compliance with these measures. Culture and accountability High-performing organisations are characterised by, among other things, clarity on goals and performance. To this end, the Board had an independent consultant review our board effectiveness and gather feedback on each of us as a contributor. Through this process, we are seeking to model the very culture that we seek to strengthen in the organisation. We are actively engaged with the Remuneration Committee and the Board as a whole in ensuring that there are clear objectives for the organisation and leaders so that we both monitor progress and measure outcomes. See page 95 to read more about how we as a Board monitor the culture of the Company. Paula Rosput Reynolds Committee Chair Year in review On appointment, I requested Justine Campbell, Group General Counsel & Company Secretary to undertake a full review of the appropriateness of the Board Committee structure, terms of reference for the respective committees and overall effectiveness. The outcome of that review was to update the remits of the various committees. Notably, the Safety, Environment and Health Committee was repurposed as the Safety & Sustainability Committee, the Audit Committee as the Audit & Risk Committee and the Nominations Committee was repurposed as the People & Governance Committee. All were with effect from 1 September 2021. With respect to the latter Committee, the subject of this letter, let me simply restate the obvious: people make all the difference. So we formed a committee that looked not just at the process of governance but its content. To read further about the Committee refresh and governance framework, see page 90. Board composition Sir Peter Gershon, our prior chair, was kind enough to appoint me to chair of the Nominations Committee when I joined the Board in January 2021. Having the opportunity to chair both this Committee and the Board allows for me to ensure there is alignment across our governance practices and to ensure robust oversight of succession. Sir Peter recognised that the Board would have quite a bit of turnover in membership due to a substantial number of directors reaching the limits of their terms and that I should be the one leading the process of identifying new directors. In the year we recruited a number of new directors from diverse backgrounds and experiences, four of whom were seated earlier in the financial year and one who will join the Board ahead of this AGM. All Board members participated in the recruitment and it was encouraging how much agreement there was as to the talent we needed. There was also a unanimity of view that we were seeking seasoned senior professionals who were confident in their capabilities, independent in their thought processes, curious about our business, and invested in a commitment to a net zero future. Collectively, they bring vitality and energy to the boardroom, gracefully balancing support and challenge. Because such a large cohort of directors has come on board at one time, we will seek to stagger terms so that we don’t encounter the same ‘cliff’ of retirements in the future as we experienced this year. Management development and succession In my first meeting as Board Chair, we began by exploring what were the most important things we needed to accomplish as a Board. From that discussion, we adopted goals for our work. One area that stood out was the need for a more robust process of reviewing management development and executive succession, a key responsibility of this Committee. We worked with our Chief Executive to review the succession pipeline for many of the key roles in the Company, to discuss development plans to our Key decisions during the year • Approved four Board appointments in the year • Reviewed and approved Board and Committee composition and refreshment • Reviewed and approved the Board Diversity Policy and progress against objectives • Reviewed and approved the continuation of the Board ‘workforce engagement’ approach Composition and Committee attendance: The Committee is made up of four independent Non-executive Directors and the Chair of the Board. Committee members Attendance Paula Rosput Reynolds1 4/4 Thérèse Esperdy¹ 4/4 Jonathan Silver¹ 4/4 Earl Shipp¹ 4/4 Tony Wood3 3/3 Former Committee members Attendance Paul Golby2 1/1 Liz Hewitt2 1/1 Mark Williamson2 1/1 Amanda Mesler2 1/1 Jonathan Dawson2 1/1 Committee Chair 1. Member of the Nominations Committee until 1 September 2021 and became a member of the refreshed People & Governance Committee from this date. 2. Member of the Nominations Committee until 1 September 2021. 3. Became a member of the Committee on appointment to the Company on 1 September 2021. 99 C o rp o rate G o vernance National Grid plc Annual Report and Accounts 2021/22 People & Governance Committee report 19_People_and_Governance_Committee_p99_100_v62.indd 99 27/05/2022 17:15

Objectives Progress The Board aspires to meet and ultimately exceed the target of 33% of Board and the CEO’s direct report positions to be held by women. There are currently six female Directors on the Board, resulting in 46% women on the Board. We currently have 33% female direct reports to the CEO. The Board aspires to meet and ultimately exceed the Parker Review target for FTSE 100 boards to have at least one Director from a non-white ethnic minority by 2021. We currently have two Directors from a non-white ethnic minority. The Board aspires to achieve 50% diversity* on the Board. We currently have 54% diversity on the Board. * Diversity of the Board is defined, in this context, as female and non-white ethnic minorities. Our Policy determines that: • all Board appointments and succession plans are made on merit and objective criteria, in the context of the skills and experience that are needed for the Board to be effective and to guard against ‘group think’; • we will only engage executive search firms who have signed up to the UK Voluntary Code of Conduct on Gender Diversity; and • we will continue to make key diversity data, both about the Board and our wider employee population, available in the Annual Report and Accounts. In the year, the Committee will review the Policy and associated objectives to consider if these remain appropriate and update as necessary to ensure these remain relevant and stretching. Report on progress against our objectives (as set out above) will continue to be outlined in the Annual Report and Accounts. Examples of the initiatives to support inclusion and diversity throughout our Company are set out on page 66. Appointments, skills and the talent pipeline The Board has a wide range of skills and experience and considers this when appointing new Directors. Skills such as ESG and climate change have been given greater focus in recent years to reflect the evolving strategy of the Company. The graph to the side provides an overview of the breadth of skills and experience currently on the Board. The Committee took account of these, as well as level of experience required and diversity, when considering appointments in the year. The appointments of Ian, Tony, Martha and Anne followed a transparent and thorough process, outlined below. • Russell Reynold Associates and MWM Consulting were appointed jointly as the search firm for each appointment made throughout the year. There are no connections between the search firms, the Company and its individual directors. They reviewed our requirements and developed specific criteria for candidate selection alongside the requirement for broader Non-executive Director characteristic requirements, including deep engineering expertise, transformational experience and strong credentials in the future of energy and ESG considerations. • Individual role profiles were created and a short list of candidates presented for consideration to the Chair of the People & Governance Committee. • Preferred candidates met with members of the Board, who reported back to the People & Governance Committee. • Leading candidates were identified and the People & Governance Committee recommended these for approval by the Board. The Committee discussed the talent pipeline regularly, giving focus to ensuring development opportunities also reached further into the organisation and identified those less advanced in their careers but with long-term potential. A Future Leaders Programme was highlighted to the Committee and would be built into the regular talent updates. The programme focuses on less senior colleagues, enabling a wider group of potential future talent to enjoy a structured development programme, using digital tools as well as tailored support. At senior management level, the Committee approved the appointment of Ben Wilson as Chief Strategy & External Affairs Officer, Stephen Woerner as President, New England, and Will Serle, who joined the Company as Chief People & Culture Officer. Phil Swift also joined with the integration of WPD as President, WPD. All four individuals joined the Group Executive Committee. Alison Kay, interim Chief Strategy & External Affairs Officer, Andy Doyle, Chief People & Culture Officer; and Badar Khan, President, US, stepped down in the year. Diversity policy objectives – progress update The People & Governance Committee noted progress against the following Board Diversity Policy objectives at its March 2022 meeting: Our Board diversity As at 31 March 2022 Male 7 Female 6 Board gender British 6 American 7 Board members by nationality Executive 2 Non-executive 11 Executive and Non-executive Directors < 3 years 6 3-6 years 4 > 6 years 3 Tenure Engineering Competitive Market Digital Risk management General Management Safety Compliance/Regulation ESG Energy International Government/Political Cyber Technology/Innovation M&A Finance/Audit/Banking Climate change 3 6 13 6 2 10 10 9 12 4 12 12 2 11 6 9 Board skills and experience 100 National Grid plc Annual Report and Accounts 2021/22 People & Governance Committee report continued 19_People_and_Governance_Committee_p99_100_v62.indd 100 27/05/2022 17:15

Engagement In October 2021, we had a roundtable session giving Committee members the opportunity to engage with key management personnel in the UK and US, and this doubled as an induction session for Jonathan and Ian, whom I was glad to welcome to the Committee. We also held a virtual question and answer session with members of the US Finance, Risk and Global Internal Audit teams in January 2022. We are looking forward to returning to the US later in 2022 when I hope to host a similar in-person session. These were key parts of the wider stakeholder engagement focus for the Board which is detailed on pages 96–97. Transactions We have performed an active role monitoring the progress of the various transactions across the Group. We received regular updates relating to the integration of WPD’s financial reporting and risk and controls framework into the Group and we had an informative session with the CEO and CFO of WPD in November 2021, who provided an overview of the business. We were regularly kept up to date on the Company’s strategic portfolio transactions, including updates from management in relation to the accounting issues linked to the UK Gas Transmission (NGG) and NECO sales. Thank you I would like to thank Committee members, the management team and Deloitte for their commitment throughout an extremely busy year and for their contribution, support and integrity provided in support of the Committee’s work. A sincere thank you must go to Doug King, who has completed his fifth and final statutory audit for National Grid. He has been a pleasure to work with and we are extremely grateful for his constructive challenge and professionalism over the past five years. Liz Hewitt Committee Chair Role of the Committee The work of the Audit & Risk Committee has never been more important: investors, regulators and other stakeholders require ever more informative and reliable reporting, not just of the results and financial position, but of resilience, risk management and the Company’s environmental, social and governance (ESG) position and progress. The Committee also oversees and evaluates the Company’s approach and controls relating to the prevention and detection of fraud and bribery, including overseeing the effectiveness of whistleblowing mechanisms. In September 2021, the Committee’s remit was expanded to have an increased delegation from the Board in relation to risk. We have spent significant time updating the reporting cadence of risk matters, working closely with the Chief Risk Officer to support effective oversight of the Company’s principal, emerging and child risks and associated enterprise risk- management processes. Review of the year I’m delighted to be writing to you following my first full financial year as Audit & Risk Committee Chair. During the year, we met four times as part of the standard schedule of Committee meetings. After the virtual world we endured in 2020/21, it was great to be able to meet in person again. Following the public announcement of the federal investigations into allegations of fraud and bribery by former National Grid employees in our US business, the Committee met four extra times in the year to provide oversight of the internal investigations. We also endorsed management broadening the scope of its investigations to receive assurance that the now substantiated allegations of fraud and bribery were isolated incidents and National Grid’s controls are appropriate and continue to operate effectively to mitigate future instances. The Committee also received updates on the successful go-live of the new enterprise resource planning (ERP) and general ledger system in the UK and we continued our oversight of ESG reporting and assurance matters. In particular, we have discussed the rapid market and regulatory developments in this space and management’s strategies to respond to these changes. It is vital that the Committee goes the extra mile by spending additional time on significant matters that present themselves each year. Nonetheless, we must ensure a laser-like focus on regulatory and compliance matters within our remit. We maintain an extensive and detailed agenda focusing on the audit, compliance and risk processes within the Company, working closely with management, the external auditor, Corporate Audit and the Finance and Legal teams. Key matters of business considered during the year are set out on page 103. Key actions during the year • Increased oversight of risk matters • Review of WPD acquisition accounting and first annual goodwill impairment test • Additional meetings to consider fraud and bribery allegations • Hosted colleague engagement sessions specific to the Committee’s remit Composition and Committee attendance: The Committee is made up of five independent Non-executive Directors. Committee members Attendance Liz Hewitt 8/8 Thérèse Esperdy 8/8 Ian Livingston¹ 3/3 Amanda Mesler 8/8 Jonathan Silver¹ 3/3 Former Committee members Attendance Paul Golby2 1/2 Committee Chair 1. Ian Livingston and Jonathan Silver joined the Committee effective 1 September 2021. 2. Paul Golby was unable to attend the additional Committee meeting on 6 July 2021 due to a prior commitment and stepped down from the Board effective 26 July 2021. Statement of Compliance with the Competition and Markets Authority (CMA) Order The Company confirms that it has complied with The Statutory Audit Services for Large Companies Market Investigation (Mandatory Use of Competitive Tender Processes and Audit Committee Responsibilities) Order 2014 (Article 7.1), including with respect to the Audit & Risk Committee’s responsibilities for agreeing the audit scope and fees and authorising non-audit services. Fair, balanced and understandable The Committee was satisfied that the Annual Report and Accounts, taken as a whole, is fair, balanced and understandable and provides the necessary information for shareholders to assess the Company’s position and performance, business model and strategy. This was recommended to the Board at its meeting in May 2022. Committee financial experience The Board is satisfied that the Chair, as a chartered accountant with significant board-level financial and audit experience, is suitably qualified and has recent and relevant financial experience. The Committee as a whole is deemed to have competence relevant to the sector in which the Company operates. 101 C o rp o rate G o vernance National Grid plc Annual Report and Accounts 2021/22 Audit & Risk Committee report 20_Audit_and_Risk_Committee_p101_105_v87.indd 101 27/05/2022 17:16

Significant issues/judgements relating to the financial statements In considering the financial results announcements and the financial results contained in the Annual Report and Accounts, the Committee reviewed the significant issues and judgements made by management in determining those results. The significant issues and judgements considered for the year ended 31 March 2022 are set out in the following table. In addition, the Committee and the external auditor discussed the significant issues addressed by the Committee during the year. You can read more in the Independent Auditor’s Report on pages 135 – 146. Matter considered Factors and reasons considered, including financial outcomes WPD goodwill impairment test • In March and May 2022, the Committee reviewed the output of the provisional and then final WPD goodwill and indefinite life intangible asset impairment test. The Committee challenged the reasonableness of the duration of the cash flow forecast used in the test and reviewed the key assumptions, including the cash flows, discount rate and terminal value. The Committee also received Deloitte’s audit conclusions over both the impairment work and the execution of management’s impairment SOX controls. The Committee concluded that the judgements taken and estimates made by management were supportable and should be disclosed as areas of judgement and key sources of estimation uncertainty. Proposed disposal of a majority stake in the UK Gas Transmission business • During the year, the Committee oversaw the judgements and accounting for the proposed sale of a majority stake in UK Gas Transmission. In particular, the Committee reviewed management’s judgement on the date the business qualified as held for sale and a discontinued operation. Based upon management’s analysis versus the criteria outlined in IFRS 5, the Committee was satisfied the judgement was appropriate. Useful life of gas assets in the context of climate change • Consistent with prior years, the Committee reviewed and concurred with management’s judgement that, notwithstanding the regulatory and legislative commitments to net zero in the jurisdictions that we operate in, there will be a role for our gas networks beyond 2050 in a range of possible scenarios and that nothing suggests that our gas asset lives should be shortened at this point. The Committee also agreed with management that the additional disclosures and sensitivities previously added to the notes to the financial statements should be retained, along with the disclosures of the matter as a key judgement and key source of estimation uncertainty. Application of the Group’s Exceptional Items Framework • In March 2022, the Committee approved revisions to the Group’s Exceptional Items Framework (Framework) to include a disclosure section, reflecting the latest guidance and recommendations from the FRC following its October 2021 Thematic Review into Alternative Performance Measures. This update also reflected transactions that had occurred since the previous update to the Framework in September 2020. • Throughout the year, the Committee considered papers from management setting out how the Framework had been applied to certain events and transactions over the period, as set out in Note 5 to the financial statements. • For each item, the Committee considered the judgements made by management, including challenging when transactions were concluded as not qualifying for exceptional treatment. • Based on the reviews performed, the Committee was satisfied the Framework had been correctly applied throughout the year. Financial reporting Going concern and viability The Committee reviewed the Group’s going concern statement, viability statement (as set out on page 153 and pages 33–35 respectively) and the supporting assessment reports prepared by management. During 2021/22, there has been continued review of the Group’s viability and going concern with support of the Finance Committee. The financial statements are prepared on a going concern basis such that the Company and the Group have adequate resources to continue in operation for at least 12 months from the date of signing the consolidated financial statements. Statutory reporting framework policy The Board has responsibility for effective management of risk for the Group including determining its risk appetite, identifying key strategic and emerging risks, and reviewing the risk management and internal control framework. The Committee, in supporting the Board to assess the effectiveness of risk management and internal control processes, relies on a number of Company-specific internal control mechanisms to support the preparation of the Annual Report and Accounts and the financial reporting process. This includes both the Board and Committees receiving regular management reports to include analysis of results, forecasts and comparisons with last year’s results, and assurance from the external auditor. With the regulatory environment evolving quickly, the Committee is kept fully informed of all new legislation, FRC advice and best practice and the requirements of the Code and Disclosure and Transparency Rules. During 2021/22, the Committee has been kept up to date with changes to legislation and regulatory reviews and has had oversight of the potential impacts. The Committee and Board receive, in advance of the full-year results, a periodic SOX report on management’s opinion on the effectiveness of internal control over financial reporting. This report concerns the Group-wide programme to comply with the requirements of SOX and is received directly from the Group SOX and Controls team. In relation to the financial statements, the Company has specific internal mechanisms that govern the financial reporting process and the preparation of the Annual Report and Accounts. The Committee oversees that the Company provides accurate, timely financial results and implements accounting standards and judgements effectively, including in relation to going concern and viability. Our financial processes include a range of system, transactional and management oversight controls. Our businesses prepare detailed monthly management reports that include analysis of their results, along with comparisons to relevant budgets, forecasts and the previous year’s results. Monthly business reviews, attended by the Chief Executive and Chief Financial Officer (CFO), supplement these reports. Each month, the CFO presents a consolidated financial report to the Board. 102 National Grid plc Annual Report and Accounts 2021/22 Audit & Risk Committee report continued 20_Audit_and_Risk_Committee_p101_105_v87.indd 102 27/05/2022 17:16

103 C o rp o rate G o vernance National Grid plc Annual Report and Accounts 2021/22 Key matters considered by the Committee The key matters considered by the Committee during the course of the year ended 31 March 2022 are set out below: Matter considered Factors and reasons considered, including financial outcomes Financial reporting • In addition to the significant issues and judgements highlighted on page 102, the Committee also considered the accounting for the Company’s disposal of its investment in the St William Homes LLP joint venture, the results of the purchase price acquisition exercise for the WPD acquisition, the ongoing impact of COVID-19 on our US retail customers’ bad and doubtful debts provision, the accounting for the Company’s interconnectors subject to cap and floor arrangements, and management’s evaluation of the IFRS Interpretation Committee’s agenda decisions on cloud computing arrangement costs. • Monitored and reviewed the integrity of the Group’s financial information and other formal documents relating to its financial performance, including the appropriateness of accounting policies, use of the going concern assumption and viability assessment. • Recommended to the Board management’s key accounting judgements and key sources of estimation uncertainty, including those related to pension valuations and environmental provisions for the 2021/22 half-year and full-year financial statements and the filing of other reports with the SEC containing financial information. ESG reporting • Reviewed management’s proposed strategy for ESG reporting and assurance, and its proposal for implementing an ESG reporting system to ensure accurate, reliable and timely ESG reporting. • Received an update on the preparation of the Responsible Business Report and the Company’s fifth TCFD disclosure. This included reviewing management’s assessment of full compliance with TCFD’s 11 recommendations. • Reviewed management’s voluntary disclosures aligned with the EU Taxonomy, including the key judgements taken in preparing the disclosure. Also, management’s disclosure maps on two leading ESG reporting frameworks: the Global Reporting Initiative and Sustainability Accounting Standards Board. • Recommended approval of the Responsible Business Report and related publications to the Board, following review of PwC’s external assurance report. WPD acquisition • In addition to the WPD accounting matters noted on page 102, in September 2021, the Committee received an update on the implementation of management’s Financial Position and Prospects Risk Mitigation Plan. • In November 2021, the WPD CEO and CFO attended the Committee to provide an overview of WPD. Internal controls • The Committee provided oversight over management’s internal investigation following the federal investigations into allegations of fraud and bribery by former National Grid employees in our US business. The Committee endorsed management broadening the scope to confirm the Company’s controls remain appropriate and continue to operate effectively. • Received regular updates on progress towards the Group’s annual US regulatory attestation. • In September 2021 and March 2022, the Committee received updates on management’s structured programme of work to strengthen the maturity of the Group’s risk and controls framework. • In May 2022, the Group CFO presented a close out update on the implementation of the new ERP and general ledger system and completion of the roll-out. Risk and viability statement • Received regular updates on the actions being taken to manage the risk in line with the Group’s risk appetite. • Received confirmation from each of the businesses and functions that risks are managed appropriately and continue to consider external influence and matters outside of the Group’s control. • Monitored the internal control processes and reviewed and challenged the going concern and viability statements, including testing for reasonable worst-case scenarios. • Satisfied itself that the Board and management’s risk management processes were functioning effectively and provided sufficient assurance. External auditor • Received an update report at each meeting, including updates on the status of, and results from, the annual audit process. • Considered the external auditor’s report on the 2021/22 half- and full-year results. • Considered throughout the year the external audit plan, including monitoring the approach, scope and risk assessments contained within. • Assessed the effectiveness and independence of Deloitte, as well as continued review and oversight of non-audit services from Deloitte. • Continued to hold private meetings with Deloitte and maintained dialogue throughout the year. • Engaged with Deloitte regularly on the forward planning and succession planning for the lead Audit Partner; this included the confirmed successor attending a number of Committee meetings during the year. • Recommended the reappointment of Deloitte as the Company’s external auditor to the Board. Corporate audit • Received regular updates on the 2021/22 audit plan and the significant findings and approved the audit plan for 2022/23. • Approved the Corporate Audit Charter which had been updated to reflect best practice and recent corporate governance developments. • Engaged with the Global Internal Audit team regularly as part of its role in the internal investigation into fraud and bribery controls. Compliance, governance and disclosure matters • Reviewed and approved the updated terms of reference for the Committee. • Received updates on ethics and business conduct, including whistleblowing to support the oversight, management and mitigation of business conduct issues as part of the controls framework. • Discussed the whistleblowing procedures in place and confirmed internal procedures remained effective, noting the communications during the year to employees, including additional communications in relation to fraud and bribery. • Received bi-annual updates in September 2021 and March 2022 of compliance with external legal requirements and regulations, including any non-compliance issues and steps being taken to improve compliance across the Group. 20_Audit_and_Risk_Committee_p101_105_v87.indd 103 27/05/2022 17:16

104 National Grid plc Annual Report and Accounts 2021/22 Audit & Risk Committee report continued Risk management and internal control Risk management Risk management is the responsibility of the Board and is key to achieving our strategic priorities. The system of risk management is established by the Board, which sets risk appetite and maintains the system of internal controls to manage risk within the Group. The Audit & Risk Committee has delegated responsibility from the Board for the oversight of the Group’s systems of internal control and risk management. This includes policies, compliance, legislation including compliance with SOX and the UK Bribery Act 2010, appropriateness of financial disclosures, procedures, business conduct and internal audit. As part of the framework across the Group, National Grid’s values – ‘do the right thing’, ‘find a better way’ and ‘make it happen’ – continue to communicate and promote a culture of integrity across the Group. During the year, the Board reviewed the principal risks facing the Group (as set out on pages 28 – 32). The Committee provided oversight and reviewed the risk management process to ensure that processes are in place to manage risk appropriately. Internal control and risk management effectiveness We continually monitor the effectiveness of our internal control and risk management processes to make sure they continue to be effective, robust and remain fit for purpose. Controls are in place to reduce either the likelihood or impact of any risk once it has occurred. Following the review over the year the Committee recommended to the Board that the processes had the correct authority, expertise and independence and provided sufficient assurance to the Company. This review includes financial, operational and compliance controls. The Committee also monitors and addresses any business conduct issues or compliance issues. The Certificate of Assurance (CoA) process operates via a cascade system and takes place annually in support of the Company’s full-year results. The Company has a Chief Risk Officer who leads on the Group’s risk management processes. Corporate Audit also supports the Group’s risk management and internal control processes. They maintain an independent and objective approach to evaluate and enhance process developments. The Global Head of Audit appointment is a matter reserved for the Committee and has responsibility for the internal audit function, attends all Committee meetings and has access to the Committee Chair as necessary. At each of the Committee’s meetings, progress of the internal audit process is reviewed including significant outstanding actions. The Committee also has regular private meetings with the Global Head of Audit. The Committee notes timelines and where actions are overdue, challenges these. Corporate Audit is responsible for developing the audit plan including engaging in major change programmes across the business. In March 2022, the Committee received the FRC’s Audit Quality Review Inspection Report of Deloitte for the audit of the Company’s financial statements for 2020/21. The Committee noted there were no key findings from the review and three areas of good practice highlighted by the FRC. The Committee also regularly engages and receives the views of senior management and members of the Finance team in forming conclusions on auditor effectiveness. Meetings are held around each scheduled Committee meeting between Committee members and the external auditor, without management being present to encourage open and transparent feedback. This additional time outside of the formal meeting environment helps us to monitor the independence, quality and effectiveness of the external audit functions. During the year, the Committee: • reviewed the quality of audit planning, including approach, scope, progress and level of fees; • reviewed the outcome of recommendations from the Deloitte Insights Report; The Committee Chair signed the updated Corporate Audit Charter in December 2021 following agreement from the Audit & Risk Committee and Safety & Sustainability Committee in November 2021 and December 2021 respectively. The Committee also received the results of the Internal Quality Assessment that took place in 2021/22. External audit The Committee is responsible for overseeing the relationship with the external auditor. The Committee Chair meets with the external auditor prior to each meeting and outside the meeting cycle on a regular basis. • Deloitte is the external auditor to the Company. • Appointed in 2017 following a formal tender process. • Reappointed at the 2021 AGM for the year ended 31 March 2022. • The Committee was authorised by shareholders to set Deloitte’s remuneration at the 2021 AGM. • Current lead Audit Partner is Doug King and 2021/22 was the fifth and final year of his term. Chris Thomas has been selected as Doug King’s successor and will oversee the statutory audit for 2022/23. The Committee has spent significant time with both Doug and Chris during 2021/22 to make sure the succession is seamless; this included Chris attending a number of Committee meetings in the year alongside Doug. Following consideration of the auditor’s independence and objectivity, the audit quality and the auditor’s performance, the Committee was satisfied with the effectiveness, independence and objectivity of Deloitte and recommended to the Board its reappointment for the year ended 31 March 2023. A resolution to reappoint Deloitte and give authority to the Committee to determine its remuneration will be submitted to shareholders at the 2022 AGM. In accordance with the CMA Order Article 4, the Committee believes that a competitive tender no later than 2026 is in the best interests of the Company given the independence, objectivity and performance of Deloitte to date and to ensure the appropriate time and planning required to execute a comprehensive tender process. This approach is in line with current regulation that requires a tender every 10 years. Effectiveness, quality and performance As part of the Committee’s responsibilities, consideration is regularly given to the effectiveness of the external auditor to verify that the quality, challenge and output of the external audit process is sufficient. Throughout the year the Committee also looks at the quality of the auditor’s reports and considers its response to accounting, financial control and audit issues as they arise. To maintain high levels of quality the Committee reviews and challenges, where appropriate, the external audit plan prior to approval. Audit quality reports received by the Committee External auditor Insights Report On an annual basis, the Committee receives a report summarising the financial reporting and/or internal control areas that, based on the results of the most recent audit, Deloitte considers management should prioritise during the year ahead. This year, the report included management’s responses to the recommendations, along with an update on prior year recommendations. Management survey Management undertook a survey in FY22 that sought views from over 100 key stakeholders involved in the external audit process across the Company. The questions comprised of the following areas: • The external auditor’s performance; key performance indicators included: – planning and scope; – robustness of the audit process; – independence and objectivity; – quality of delivery; – quality of people and service; and – understanding of the Company. • National Grid’s commitment to the audit. Management, the external auditor, and the Committee discussed the results of the survey, which showed that the external auditor’s score had remained consistent with the prior year. Deloitte agreed to put in place an action plan for areas of improvement. 20_Audit_and_Risk_Committee_p101_105_v87.indd 104 27/05/2022 17:16

105 C o rp o rate G o vernance National Grid plc Annual Report and Accounts 2021/22 • held private meetings with Deloitte without management present; • held meetings with the UK Partner and US Partner; • confirmed that the Deloitte external audit process had been delivered effectively; and • met with, and approved the appointment of, and transition plan for, Chris Thomas, the new lead Audit Partner who will take over for the 2022/23 audit year. Auditor independence and objectivity The independence of the external auditor is essential to the provision of an objective opinion on the true and fair view presented in the financial statements. The Committee considered the safeguards in place, including the annual review by Corporate Audit, to assess the external auditor’s independence. The external auditor reported to the Committee in May 2022 that it had considered its independence in relation to the audit and confirmed that it complies with UK regulatory and professional requirements, SEC regulations and Public Company Accounting Oversight Board (PCAOB) standards and that its objectivity is not compromised. The Committee took this into account when considering the external auditor’s independence and concluded that Deloitte continued to be independent for the purposes of the external audit and confirmed that this recommendation was free from third-party influence and restrictive contractual clauses. Non-audit services In line with the FRC’s Ethical Standard and to maintain the external auditor’s objectivity and independence, we have a policy governing Deloitte’s provision of non-audit services. The cap on the total fees that may be paid to the external auditor for non-audit services in any given year is 70% of the average audit fees paid in the last three financial years. The provision of any non-audit service by the external auditor requires prior approval. A subset of services where, due to their nature, we believe there is no threat to the auditor’s independence or objectivity qualify as pre-approved. These services must have a value under £250,000 (increased by Committee approval during the year from £50,000) and be reviewed in advance by the CFO. These services are limited to: • audit, review or attest services. These are services that generally only the external auditor can provide, in connection with statutory and regulatory filings. They include comfort letters, statutory audits, attest services, consents and assistance with review of filing documents; and • other areas, such as provision of access to technical publications. Management presents a list of all non-audit work requests to the Committee to ensure the Committee is monitoring all non-audit services provided. Non-audit service approvals during 2021/22 principally related to comfort letters for debt issuances and refreshes of debt issuance programmes. External auditor fees The amounts payable to the external auditor, Deloitte, in the past two years were: Statutory auditor’s fees (£m) 19.8 19.918.9 1.0 17.0 2.8 16.9 1.1 2021/22 2020/21 2021/22 2019/20 18.0 Audit services Non-audit services 18.9 1.0 Total billed non-audit services provided by Deloitte during the year ended 31 March 2022 were £1.0 million, representing 5% of total audit and non-audit fees. In 2020/21, non-audit services totalled £2.8 million (14% of total audit and non-audit fees). Further information on the fees paid to Deloitte for audit, audit-related and other services is provided in Note 4 to the financial statements on page 162. Total audit and audit-related fees include the statutory fee and fees paid to Deloitte for other services that the external auditor is required to perform, such as regulatory audits and SOX attestation. Non-audit fees represent all non-statutory services provided by Deloitte. 20_Audit_and_Risk_Committee_p101_105_v87.indd 105 27/05/2022 17:16

Key decisions during the year • Approved the year-end sustainability disclosures • Approved the Company’s environmental sustainability strategy • Approved the Committee’s revised remit as the Safety & Sustainability Committee • Approved the FY22 Audit Plan in respect of safety and sustainability matters Composition and Committee attendance: The Committee is made up of four independent Non-executive Directors. Committee members Attendance Earl Shipp 6/6 Anne Robinson1 2/2 Tony Wood2 4/4 Martha Wyrsch2 4/4 Former Committee members Attendance Mark Williamson3 2/2 Liz Hewitt2 2/2 Amanda Mesler2 2/2 Paul Golby4 1/1 Committee Chair 1. Anne Robinson was appointed to the Committee effective 19 January 2022. 2. Tony Wood and Martha Wyrsch were appointed to the Committee and Amanda Mesler and Liz Hewitt stepped down from the Committee effective 1 September 2021. 3. Mark Williamson joined the Committee effective 1 September 2021 and stepped down from the Board effective 31 December 2021. 4. Paul Golby stepped down from the Board effective 26 July 2021. 106 National Grid plc Annual Report and Accounts 2021/22 in January 2022 following the completion of the investigation. Lessons learnt have already been communicated throughout the organisation and will influence our practices going forward. Throughout the year, several significant storms in the UK and the US highlighted that we have to redouble our preparedness. The storms saw large swathes of customers disconnected from power for, in some cases, significant periods of time. Our people worked tirelessly to restore service to every last disconnection safely and securely. The emergence of extreme weather has potential impacts on our assets and our workforce. We will continue to provide oversight of the Company’s efforts to adapt to extreme weather and to ensure our safety processes are robust and resilient to withstand whatever may come our way. Sustainability The second priority of this Committee is sustainability. In line with the Committee’s expanded remit, we considered the Company’s TCFD strategy through the year and are pleased to report that the Company has fully aligned its disclosures with the TCFD Recommended Disclosures. See pages 70 – 83 for further information. Whilst the Audit & Risk Committee focuses on the financial aspect of TCFD, we spent time considering the climate scenario analysis and the Company’s wider climate strategy and commitments. We also received, for the first time this year, the Company’s Climate Transition Plan for review. At the 2021 AGM, shareholders approved our first ever climate resolution, outlining our targets for net zero and our commitment to bring the Company’s climate transition plan to a vote at the 2022 AGM. This plan will provide the opportunity to review our metrics and data in this area. We also continued to review the Company’s wider sustainability strategy and performance. National Grid’s Responsible Business Report provides additional insights into our organisational aims and ambitions, and our performance against our net zero targets and wider sustainability strategy. We convened an ad-hoc Committee meeting in March 2022 to specifically consider our external reporting obligations in relation to sustainability and reviewed and commented on the initial drafts of these. We also brought the entire Board together for a separate session to undertake a thorough review of the aims, ambitions and measures to ensure that these commitments are embedded in the Board’s stewardship. Looking forward As we navigate these changing and challenging times, we will continue to ensure we are having the right discussions and challenging the progress and pace at which we are moving. It is sure to be another busy year and I look forward to providing you with a further update on our progress. Earl Shipp Committee Chair and growing societal expectations, the Committee welcomed new members. We thus have a refreshed composition, providing significant experience across engineering, safety, and process-focused industries as well as in-depth knowledge of the energy transition, climate change and stewardship of environmental and sustainability matters. Despite the widening of our remit, we have not lost sight of the health considerations we have customarily monitored. We saw continuing COVID-19 impacts being felt in both the UK and US through most of the year. Towards the end of the fiscal year, we monitored the gradual and safe return to the workplace for those who have been working from home. It is appropriate to recognise everyone’s perseverance and forbearance throughout the last two years. In particular, the contributions of our front-line workers, who continued to work in the field through the pandemic, were exemplary. They have done a marvellous job designing, implementing and complying with numerous protocols to keep themselves healthy and thus protecting our customers as well. Our numbers of sickness within the workforce were low and productivity was maintained throughout. Nevertheless, the prolonged pandemic took an emotional toll on the entire organisation and the Committee has been briefed on the strengthening of the support the Company offers through various employee assistance programmes. Safety, wellbeing and asset protection Safety is always our number one priority. We monitored both process and personal safety at every meeting and requested ‘deep dives’ into selected events where we felt our independent oversight would be of value. Whilst we have continued strong progress on our leading safety indicators, our lagging (LTIFR) safety performance has been challenging to sustain through the pandemic. This is a key area of focus and one that we will continue to track as a Committee. The integration of WPD also progressed throughout the year and we familiarised ourselves with WPD’s measurement programme and how it would be aligned with National Grid’s. In January 2022, Phil Swift, President of WPD, provided us with an overview of the safety management of WPD, including lessons learnt that were being shared between National Grid and WPD. Overall, we are mindful of the amount of organisational change ongoing. Given this backdrop, we have reviewed safety performance and progress; we will continue to challenge the organisation to keep its strong safety focus. You can see some of our key safety results at page 27. In September 2021, there was a fire at one of our interconnectors at Sellindge, where we own and operate HVDC facilities across the English Channel. We are grateful that no one was injured in this incident, in part due to the excellent training and quick thinking of our operators on duty at the time. The damage to the facility and the potential risk to human life were thoroughly reviewed by the Committee; we convened an additional meeting in December 2021 to receive a report from the Group Chief Engineer on the status of the investigation and a further update was provided Safety & Sustainability Committee report Review of the year I’m pleased to present to you my first report as Chair of the Safety & Sustainability Committee. After a review undertaken earlier in 2021, we refreshed our remit. In addition to health and safety, we agreed to increase monitoring of sustainability-related issues including external climate-related disclosure requirements. You’ll note our new name, the Safety & Sustainability Committee, with effect from 1 September 2021. To ensure we are well positioned to advise the Board on these wider strategic considerations, given the rapidly changing external environment 21_Safety_and_Sustainability_Committee_p106_v48.indd 106 27/05/2022 17:20

Key decisions during the year • Approved the Group’s financial risk appetite, aligning this with the Board’s refreshed risk appetite framework • Reviewed the pension arrangements linked to the Group’s key transactions and approval of the Group pension strategy • Considered the structure of the sale of the equity interest in the St William Homes LLP joint venture to The Berkeley Group plc • Approved forecast expenditure for 2022/23 insurance renewals Composition and Committee attendance: The Committee is made up of three independent Non-executive Directors and two Executive Directors. Committee members Attendance Thérèse Esperdy 4/4 Jonathan Dawson 4/4 Liz Hewitt2 2/2 Andy Agg 4/4 John Pettigrew 4/4 Former Committee members Attendance Mark Williamson1 1/1 Jonathan Silver2 2/2 Committee Chair 1. Mark Williamson stepped down from the Board effective 31 December 2021. 2. Liz Hewitt joined the Committee and Jonathan Silver stepped down from the Committee effective 1 September 2021. 107 C o rp o rate G o vernance National Grid plc Annual Report and Accounts 2021/22 Insurance The fire at one of our interconnectors at Sellindge pushed significant focus on insurance for the Committee and has had an impact on the Company’s approach to renewals for 2022/23, whilst market conditions have continued to harden. The Head of Insurance has spent significant time with the Committee providing updates on the claims process whilst I’ve worked with my fellow Committee Chairs on implications of safety and accounting. Tax Following President Biden’s election, we’ve stayed abreast of the US congressional tax proposals and potential impacts on the Group. In November 2021, we invited KPMG to update us on the key expected outcomes but indeed, at the time of writing, congressional action is still a moving target. In the UK, with the increase in the minimum statutory rate, we have reviewed the changes that arise in the current year deferred taxes and the exceptional charge to remeasure the opening deferred tax liabilities going forward. Pensions In the UK, pension investments are managed by independent Trustees. However, it is the Committee’s duty to ensure funding is adequate to meet obligations. As the funding positions of the various defined benefit schemes improve, it allows the Trustees to reduce investment risk to everyone’s benefit. This year, we oversaw the transfer of WPD’s pension arrangements to National Grid and Trustee appointments will be refreshed in 2022/23. During the year, we invited Mercer to provide external expertise to the Committee on the UK pension landscape. We also received detail on the Pension Schemes Act 2021 and the potential implications this had on the Group. In the US, pension investments are overseen by an internal fiduciary committee comprising senior leaders with appropriate levels of financial experience. Over the course of the year, we have worked to ensure the transition of pension and other retiree benefits of our Rhode Island colleagues as they move across to PPL. There has also been further de-risking of our pension and retiree welfare investments in light of the improvement to funding positions in recent years. Looking forward Given the impact of geopolitical events on energy markets and inflation in the broad economy, we continue to monitor the Group’s risk appetite. We regularly review stress tests and seek to bring our expertise from other sectors of the economy to foster a holistic view of financial markets. Thérèse Esperdy Committee Chair Review of the year This year we met on four scheduled occasions to undertake our responsibility as a Committee of monitoring the financial risk of the Group, focusing on the key areas within our remit: Treasury, Tax, Pensions and Insurance. Despite continued challenges presented by the pandemic, we engaged directly with a number of the finance professionals in the Company. Jonathan Silver and I met with a cross-section of members in the Treasury, Tax, Pensions and Financial Planning teams in Massachusetts. As most organisations are now back in offices, we will continue to arrange separate engagement sessions. Transactions It has been vital to continue our focus on the Group’s financing strategy, which is supporting the portfolio repositioning of the Group. We received regular updates during 2021/22 on the progress of the ongoing transactions. As a Committee we’ve been particularly interested to hear about the progress of WPD colleague integration into key departments such as Treasury, Tax, Pensions and Insurance; I’m pleased to report the integration continues to progress well. We’ve monitored progress of the sale of a majority stake in UK Gas Transmission throughout the year, including a review of the engagement with credit rating agencies and of the UK Gas Transmission derivative book ahead of the launch of the sale process. We have also continued to monitor progress on the sale of NECO to PPL. Financial risk appetite During the year, the Committee reviewed the Group’s financial risk appetite and took the opportunity to evaluate how financial risk was managed in line with the Board’s refreshed risk appetite framework. Treasury It has been another busy year for the Company in terms of bond issuances. I’m delighted that National Grid continues to attract strong investor demand in the market at both holding and operating company levels. The issuances we’ve seen have typically had large orderbooks and tight spreads. We continue to contribute to the Group’s Green Financing commitments and in August 2021 National Grid plc issued a dual tranche €1.5 billion bond across 7 years and 12 years; the 7-year tranche was issued in a green format. In March 2022, we received a presentation from one of our core global banking partners that provided a macro market update and included key updates on the external view of National Grid’s bond issuances and impacts of the conflict in Ukraine and retail energy crisis. Throughout the year, we monitored the actions of the credit rating agencies. As noted above, we still have significant transactional activity ongoing and hence closely monitor our gearing, which will be reduced as asset proceeds are used to restore ratings headroom. Finance Committee report 22_Finance_Committee_p107_v54.indd 107 27/05/2022 17:21

Key activities during the year • Development of 2022 Directors’ Remuneration Policy • Stakeholder consultation • Incorporation of portfolio transactions into remuneration • New members and transition of the Committee The Committee is made up of four independent Non-executive Directors Composition and Committee attendance: Committee members Attendance Ian Livingston1 4/4 Martha Wyrsch2 3/4 Jonathan Dawson 7/7 Amanda Mesler 4/4 Former Committee members Attendance Mark Williamson3 5/5 Earl Shipp2 2/3 Jonathan Silver2 3/3 Committee Chair 1. Ian Livingston joined the Committee effective 1 August 2021 and became Committee Chair effective 1 January 2022. 2. Martha Wyrsch was appointed to the Committee and Earl Shipp and Jonathan Silver stepped down from the Committee effective 1 September 2021. 3. Mark Williamson stepped down from the Board effective 31 December 2021. To do this, we set out to answer several key questions: • What are the right performance measures that clearly link the Company’s performance and long-term strategy to value creation? • How can we better reflect the strategic importance of the Company’s net zero strategy in remuneration? • How can we create flexibility given the increasingly dynamic external context? Over the last several months, the Committee and I have valued the engagement and collaboration of many of our major shareholders. The key elements of our new Remuneration Policy are summarised on page 113 and details are available on pages 124 − 128. Our Remuneration Policy proposal will be subject to a binding vote at the 2022 AGM. Our Directors’ Remuneration 2021/22 report is structured to cover three key areas: 1) Remuneration at a glance 2) 2021/22 implementation report 3) 2022 Directors’ Remuneration Policy and implementation Performance and remuneration outcomes during the year Salary, pension and benefits Our review of Executive Directors’ salaries this year considered external market factors alongside wider workforce pay increases. The Committee has awarded salary increases of 3.75% to John Pettigrew and 6.5% to Andy Agg, both effective 1 July 2022. These changes are compared to an average increase of 4% across the UK wider workforce. Our previous Directors’ Remuneration Report (DRR) disclosed a three year plan to bring Andy Agg’s base salary to a level broadly equal to the market median for his role. Andy’s increase this year is the last installment to align his base pay. As set out in our DRR last year, we acknowledged expectations from our shareholders to align Executive Directors’ pension contribution rates with the majority of the UK wider workforce and have set out an approach to progressively do so. To that end, the pension allowances of John Pettigrew and Andy Agg were reduced to 12% of salary as of 1 April 2022, in line with pension contribution levels in the UK wider workforce, representing a material reduction in their fixed remuneration levels. Annual Performance Plan (APP) The APP for 2021/22 was based on financial performance measures (60%), operational measures (20%) and individual objectives (20%) that reflect key business and operational performance goals. Dear shareholders, This is my first letter since becoming Chair in January 2022. Firstly, I would like to thank my predecessor Jonathan Dawson for his strong stewardship of the Remuneration Committee over the last nine years and all his help in ensuring a smooth transition of the Chair. This year has presented a full agenda for the Board and Remuneration Committee. An ambitious business plan to deliver against the backdrop of an increasingly dynamic and demanding external context presented several important considerations for remuneration, particularly in the context of the new Remuneration Policy. With the COVID-19 crisis a persistent and dominant theme at the start of the year, the Company maintained its position of no employees furloughed, no compulsory redundancies, and no pay reductions. In November 2021, the world turned its attention to COP26 and the necessity and urgency of a net zero future for all intensified – further underscoring the importance of the Company’s Climate Transition Plan and net zero strategy, a key area we focused on in our Directors’ Remuneration Policy review this year. In the final months of the financial year, the effects of higher gas prices, exacerbated by the tragic world events in Ukraine, presented serious affordability challenges for both consumers and businesses. The recent announcement of the early return of £200 million of interconnector revenue to UK consumers over the next two years and a plan to deliver £400 million of sustainable cost efficiencies per annum by 2024, with £140 million delivered to-date, demonstrate the Company’s commitment to doing its part to support and enable a more affordable energy future for consumers. Despite these challenges, the Company delivered strong operational performance this year, reflecting substantial investment and a focus on delivering a clean, fair, and affordable energy future. In March 2021, the Company announced the acquisition of WPD, the UK’s largest electricity distribution business, and the sale of our US Rhode Island business. In March 2022, the Company announced the sale of a 60% equity stake in the UK Gas Transmission business. These transactions are a significant evolution of the Group’s strategy and a major pivot towards electricity. The impact of the portfolio changes on financial results and performance outturns for the year are shown in greater detail in the implementation section of our remuneration report. This year also presented the opportunity to review our Directors’ Remuneration Policy (last approved in 2019) and examine how it might evolve. As we undertook this review, we sought to ensure that the best interests of all of our stakeholders today and over the next few years are properly addressed. 108 National Grid plc Annual Report and Accounts 2021/22 Directors’ Remuneration report 24_Remco_Chairs_Statement_p108_110_v49.indd 108 27/05/2022 17:22

Financial performance (60%) The Company has again had a successful year, delivering strong financial results while investing in the net zero energy transition. In parallel, we saw the solid execution of a complex set of portfolio transactions to integrate WPD, progress on the agreement to sell the US Rhode Island business, and the sale of a majority stake in the UK Gas Transmission business. Formulaic outturns from the financial portion of the APP were 89.0% of the maximum based on achievement of 78.0% of maximum for Group Underlying EPS and 100% of maximum for Group RoE. APP outcomes are determined by financial results, with technical adjustments to targets including currency adjustments, unbudgeted pension costs and scrip dividend dilution, all in line with past practice. Operational performance (20%) The Committee allocated 10% of the operational portion of the 2021/22 APP to ensure strong execution of the portfolio transactions and a focus on value delivery for shareholders. Over the year, we announced the sale of a 60% equity stake in the UK Gas Transmission business, effectively managed regulatory and legal processes, and demonstrated solid progress on the initial integration of WPD into the Group. In this context, the Committee has set the performance outturn for the transactions at 10 out of 12 which is 83.33% of the maximum. ESG measures make up the remaining 10% of the operational portion of the 2021/22 APP. These measures reflect quantifiable environmental emissions and diversity targets aligned to key commitments set out in our RBC. The outturn for the ESG portion of the APP was 6 out of 8 which equates to 75% of the maximum, reflecting solid delivery of SF6, CO2 and methane emission reductions, and progress on DEI goals. Individual objectives (20%) Performance against individual objectives resulted in outturns of 80% and 85% of the maximum for John Pettigrew and Andy Agg respectively. Taking all the elements of performance together, the overall APP awards to the Executive Directors on the Board on 31 March 2022 were 85.2% of the maximum for John Pettigrew and 86.2% of the maximum for Andy Agg. The details of the 2021/22 APP are further outlined on pages 114 − 116. In reaching its overall decisions on the APP, the Committee considered the strong performance and delivery throughout the year across financial, operational, and individual objectives and determined no discretion was required to the APP formulaic outcome. Long-Term Performance Plan (LTPP) The measurement period of the 2019 LTPP ended on 31 March 2022 and consisted of two measures – Group Value Growth and Group RoE. As discussed in last year’s report, the weighting of performance measures for the 2019 LTPP is one third Group RoE and two thirds Group Value Growth. The formulaic vesting outcome of the 2019 LTPP was 74.22% of the maximum. The Committee reviewed whether there were any factors which might cause it to reduce the vesting levels and concluded after careful consideration that the vesting levels fairly reflected business performance and shareholder experience over the performance period. As communicated in our DRR last year, we took the decision, given the timing and complexity of the portfolio transactions, to disclose the performance targets for the 2021 LTPP in this year’s report. Note the 2021 LTPP award reverts to equal weighting of Group RoE and Group Value Growth performance measures. More details are set out on page 117. Single figure and shareholding The 2021/22 total remuneration single figures for John Pettigrew and Andy Agg are £6.5 million and £3.5 million respectively. These outcomes reflect strong, consistent short-term annual performance delivery in 2021/22 and longer-term value creation. The 2019 LTPP outcome makes up nearly £4 million of the overall single figure for John Pettigrew and nearly £2 million for Andy Agg. The value of the 2019 LTPP award is driven by the material share price growth of over 30% over the three-year performance period which in addition to dividends resulted in a total shareholder return (TSR) of 52%. These outcomes also reflect the heavy weighting on long-term share-based pay in our reward structure. In last year’s DRR, we set out an intent to review our post-employment shareholding requirement. As part of our Policy review, the Committee has concluded no changes are required. This decision considers an in-employment shareholding requirement (CEO: 500% of salary and other Executive Directors: 400% of salary) which is at the top end of market practice, and a post-employment shareholding requirement (200% of salary), which is in line with market practice. The Committee felt strongly it would be in the interest of shareholders to preserve the Executive Directors’ shareholding requirements levels to ensure strong alignment with the shareholder experience. Our 2022 Policy renewal During the year, the Committee conducted a review of the Executive Directors’ Remuneration Policy, considering: 1) alignment to our business strategy and wider stakeholders (incentive measures and target-setting); 2) alignment to our talent strategy (quantum and market practice); and 3) corporate governance requirements. Having discussed these proposals with a number of our shareholders and governance bodies, the Committee proposes to make the following key changes to the Remuneration Policy, subject to their approval by shareholders at the 2022 AGM. Financial and operational performance measures: • Retain Group RoE in both the APP and LTPP to ensure the efficiency of annual operational delivery and the quality and sustainability of long-term shareholder value creation. • Replace Group Value Growth in our LTPP with a three-year cumulative Underlying EPS measure. We believe a more recognised and commonly used measure will simplify remuneration and enhance transparency for both shareholders and employees, and create strong alignment to the Company’s investor proposition. • Retain an in-year earnings measure – i.e. Underlying EPS in our APP to ensure we continue to incentivise and reward strong operational delivery. Whilst we recognise our short-term (APP) and long-term (LTPP) financial measures are similar, we believe these are the right measures to support delivery of the business strategy and the resultant creation of shareholder value. The combination of annual and long-term earnings and returns measures act together to incentivise strong operational delivery in-year, together with long-term sustainable growth. As such, financial measures have been designed to incentivise different elements of performance in the short-term (APP) and the long-term (LTPP). See pages 129 − 130 for a further overview of our financial performance measures for 2022/23. Environmental, Social and Governance Our 2022 Policy expands the focus of ESG and incorporates further measures aligned to targets set out in our RBC. • Broaden and simplify ESG measures in the APP to reflect key elements of our responsible business strategy – customers, colleagues and DEI. • Introduce net zero transition measures aligned to: i) quantitative reductions in our Scope 1 emissions; and ii) the enablement of the net zero transition. 109 C o rp o rate G o vernance National Grid plc Annual Report and Accounts 2021/22 24_Remco_Chairs_Statement_p108_110_v49.indd 109 27/05/2022 17:22

Finally, we recognise the value of some flexibility in the Policy to better adapt to business and market changes. As such, our new Policy provides greater flexibility to: • enable the Committee to set appropriate financial, strategic, and ESG measures and weightings in respect of each APP/ LTPP award; and • provide for the possibility of a one-year additional maximum incentive level of up to 50%, to be used only in exceptional circumstances (e.g. recruitment). No material changes would be made to performance measures without prior consultation with major shareholders. Other matters When taking remuneration decisions in relation to Executive Directors, the Committee takes into consideration remuneration data across the industry (through market benchmarking) and our wider workforce (e.g. CEO pay ratio, gender and ethnic pay gap data, and colleagues’ views on executive pay) to ensure decisions are fair, equitable, and aligned to performance in line with the Company’s values. Fair and equitable reward is at the heart of National Grid’s values. Within the UK, National Grid continues to be an accredited real living wage employer by the Living Wage Foundation. Our UK mean gender base pay gap of -1.6% (median of 2.4%) has shown a strong trend since 2018 in closing the pay gap between genders working in comparable roles. Across the US, our mean gender base pay gap continues to improve from 13.5% in 2021 to 12.6% this year. Additional gender and ethnic pay gap data is reported in our Responsible Business Report (RBR). Payment to past Directors Nicola Shaw stood down from the Board on 26 July 2021 and stayed with the Company until after the conclusion of the RIIO-T2 CMA appeal process and continued as Chair of the Company’s subsidiaries, National Grid Electricity Transmission plc and National Grid Gas plc. She was deemed to be a good leaver given her overall long-term strong performance and contribution to the business. She remained in active employment until 31 October 2021, after which she was not eligible for 2021/22 APP and received salary and benefits until her final employment date of 30 April 2022, as per the terms of her contract. Her APP was pro-rated for her period of active employment for 2021/22. Her 2019 LTPP will vest at the normal vesting date in July 2022, subject to performance conditions and is pro-rated for time served to the final employment date of 30 April 2022, in accordance with the plan rules. Details of Nicola Shaw’s remuneration in relation to the period 1 April 2021 to 26 July 2021 (qualifying service as an Executive Director) and 27 July 2021 to 31 March 2022, are presented in the Single Total Figure of Remuneration table on page 114. All payments are in accordance with her service agreement, the Directors’ Remuneration Policy and in line with our June 2021 Corporate Governance disclosure. Conclusion On behalf of the Committee, I would like to thank shareholders for their input and engagement this year. We continue to aim to maintain an open dialogue on remuneration matters and welcome your further comments and feedback. We respectfully ask for your support at the forthcoming AGM. Lord Ian Livingston Committee Chair 110 National Grid plc Annual Report and Accounts 2021/22 Directors’ Remuneration report continued 24_Remco_Chairs_Statement_p108_110_v49.indd 110 27/05/2022 17:22

Our ‘At a glance’ highlights the performance and remuneration outcomes for our Executive Directors for the year ended 31 March 2022. Further detail is provided in the Statement of implementation of Remuneration Policy in 2021/22. Policy summary (adopted 2019) Outcomes for 2021/22 Salary Target mid-market salary levels against: • FTSE 11 − 40 for UK-based Executive Directors • US general industry and US energy services companies with similar revenue for US-based Executive Directors • John Pettigrew’s salary increased by 2.3% to £1,053,000 as of 1 July 2021 in line with wider workforce increases • Andy Agg’s salary increased by 6.5% to £675,000 as of 1 July 2021 reflecting a previously communicated progressive increase to continue to align his salary with the market rate for his role Pension and benefits Provide market competitive reward to assist in the attraction and retention of talent: • Eligible to participate in defined contribution plan (or defined benefit if already a member). • From April 2022, all UK Executive Directors’ pension contributions are 12% of base salary in line with levels across the UK-based workforce. • John Pettigrew’s cash allowance was 23.4% of salary for 2021/22 (compared with 26.7% in 2020/21); reducing to 12% on 1 April 2022 • Andy Agg’s cash allowance was 20% of salary for 2021/22; reducing to 12% on 1 April 2022 • Other benefits remain unchanged Annual Performance Plan Incentivise and reward achievement of annual financial, operational, and individual performance: • Maximum opportunity is 125% of salary • 50% paid in cash • 50% paid in shares which must be retained for at least two years or until the shareholding requirement is met, if later • Subject to both malus and clawback 2021/22 Annual Performance Plan Performance measures (% weighting) Financial (60%) Operational (20%) Individual – John Pettigrew (20%) Individual – Andy Agg (20%) 89.00% 79.17% 80.00% 85.00% APP outcome % of Maximum Actual (£’000s) Maximum (£’000s) John Pettigrew 85.2% £1,116 £1,309 Andy Agg 86.2% £717 £831 Long-Term Performance Plan Incentivise long-term business performance and align reward to our strategy: • Maximum award level is 350% of salary for CEO and 300% for other Executive Directors • Vesting is subject to long-term performance conditions • Shares which must be retained for at least two years following vesting or until the shareholding requirement is met, if later • Subject to both malus and clawback 2019 Long-Term Performance Plan Performance measures (% weighting) Group Value Growth (66.67%) Group RoE (33.33%) 100.00% 22.67% LTPP outcome % of Maximum Actual (£’000s) Maximum (£’000s) John Pettigrew 74.22% £3,997 £5,386 Andy Agg 74.22% £1,980 £2,668 Shareholding requirements Create strong alignment with shareholder experience: • 500% of salary for CEO • 400% of salary for other Executive Directors • Post-employment shareholding requirement of 200% of salary for two years 1. Represents beneficially owned shares as well as shares held in trust as part of the APP deferred share awards. 2. Represents the 2020 and 2021 LTTP awards subject to ongoing performance. 3. Represents LTTP shares subject to holding period plus shares held as part of the Sharesave scheme, if any. John Pettigrew Andy Agg Shareholding requirement Unvested subject to performance2  Shares counting towards shareholding requirement1 Shares subject to continued employment3  0% 500% 1,000% 1,500% 2,000% 2,500% 455% 355% 838% 704% 1,097% 353% Andy Agg is expected to meet his shareholding requirement next year. Note As noted in the Chair letter (payment to past Directors), Nicola Shaw stood down from her role as Executive Director on 26 July 2021. She remained in active employment until 31 October 2021, after which she was not eligible for 2021/22 APP and received salary and benefits until her final employment date of 30 April 2022 as per the terms of her contract. Details of Nicola’s remuneration in relation to the period 1 April 2021 to 26 July 2021 (qualifying service as an Executive Director) and 27 July 2021 to 31 March 2022, are presented in the Single Total Figure of Remuneration table on page 114. 111 C o rp o rate G o vernance National Grid plc Annual Report and Accounts 2021/22 Remuneration at a glance – 2021/22 25_Remco_At_a_Glance_p111_113_v46.indd 111 27/05/2022 17:28

Notes: Maximum total figure of remuneration for 2020/21 for John Pettigrew was £6.557 million and £2.625 million for Andy Agg. The 2021/22 single total figures of remuneration for John Pettigrew and Andy Agg are £6.506 million and £3.517 million respectively. These outcomes reflect strong annual performance delivery in 2021/22 and longer-term value creation as evidenced in the 2019 LTPP outcome. The single total figures of remuneration are in large driven by the heavy weighting on long-term share awards which make up to two-thirds of total remuneration, and nearly 80% of variable pay. The 2019 LTPP performance is driven in part by the impact of share price growth of 31.6%, yielding a Total Shareholder Return (TSR) of 52% over the three-year performance period in addition to long-term business performance delivery. The 2021/22 total single figures represent an achievement of 79.4% for John Pettigrew and 75.7% for Andy Agg of the total maximum opportunity for 2021/22. This is line with last year’s outcomes which were 81.8% for John Pettigrew and 83.9% for Andy Agg of the total maximum opportunity for 2020/21. Alignment of remuneration with our business strategy We align our performance linked elements of remuneration (APP and LTPP) through our strategic priorities, our RBC commitments, and our vision of a clean, fair and affordable energy future. Our vision and values Our vision is to be at the heart of a clean, fair and affordable energy future. Every day we do the right thing, find a better way, and make it happen. Our strategic priorities Enable the energy transition for all Grow our organisational capability Our RBC commitments The environment Our people Our communities The economy Our governance Deliver for customers efficiently Empower colleagues for great performance Key principles of our remuneration strategy • Reward delivery of the Group’s strategy in a matter that is simple, transparent, and aligned to shareholders’ interests • Attract, motivate, and retain senior executives with market-competitive reward • Align performance measures to the way National Grid earns its returns for shareholders, with targets set to incentivise stretching financial and operational performance in line with shareholder expectations • Reflect and underpin the Company’s vision, values, and contribution to society How we achieve this in practice • Alignment of APP and LTPP performance measures to core financial and non-financial KPIs • Heavy weighting towards share-based long-term pay to reflect the nature and duration of National Grid’s businesses and asset lives • A mandatory two-year holding period for APP share awards and vested LTPP awards • A very high minimum shareholding requirement for senior executives (500% for the CEO – equivalent to nine times the after-tax salary) • A post-employment shareholding required for all senior executives Our 2022 Remuneration Policies are aligned to our business strategy Enable the energy transition for all Deliver for customers efficiently Grow our organisational capability Empower colleagues for great performance Addition of net zero measures in LTPP aligned to commitment set our in our RBC Financial measures strongly aligned to incentivise operational excellence and long-term value creation Increased flexibility to better adapt measures to align to critical priorities that underpin short/ longer-term performance Emphasis on Company culture and DEI in APP Single total figure of remuneration for 2021/22 A comparison of the 2021/22 single total figure of remuneration, with the maximum remuneration if variable pay had vested in full, is set out below. John Pettigrew (in £’000s) Minimum On target Maximum Single figure 2021/22 Single figure 2020/21 Fixed pay APP LTPP Share price growth 0 2,000 4,000 10,0008,0006,000 4,796 8,199 6,506 5,367 1,398 Andy Agg (in £’000s) Minimum On target Maximum Single figure 2021/22 Single figure 2020/21 Fixed pay APP LTPP Share price growth 0 2,000 4,000 10,0008,0006,000 2,732 4,644 3,517 2,204 820 112 National Grid plc Annual Report and Accounts 2021/22 Directors’ Remuneration Report continued Remuneration at a glance – 2021/22 continued 25_Remco_At_a_Glance_p111_113_v46.indd 112 27/05/2022 17:28

Our proposed Remuneration Policy seeks to ensure strong alignment with National Grid’s strategic priorities and to measure the success of management in achieving key short-and long-term financial, operational, and ESG objectives. The key elements of our Policy and the implementation for 2022/23 are set out below: • ESG and, in particular, the energy transition, is at the heart of our strategic priorities. Our Policy expands the focus on ESG measures in the APP and incorporates further measures in the LTPP aligned to targets set out in our RBC. • The replacement of Group Value Growth with a cumulative Underlying EPS measure in the LTPP creates a simpler and transparent measure of performance aligned to measure long-term value creation together with Group RoE. • Flexibility in the Policy to adapt to the changing nature of the business and enable the attraction, retention, and incentivisation of talent in an increasingly competitive market. In addition to the above, the proposed Policy also provides, in exceptional circumstance only (such as recruitment), flexibility to award up to 50% of salary in addition to the normal policy maximum across APP/LTPP for one year only. Remuneration Policy 2022 overview Proposed Policy changes (2022) Implementation in 2022/23 Salary • No change • John Pettigrew’s salary will increase by 3.75% to £1,092,500 – below the average increase of the wider workforce at 4% • Andy Agg’s salary will increase by 6.5% to £719,000 – in line with previously communicated intention to align his salary with the market rate over a multi-year period subject to performance and progression in the role Pension and benefits • All new and existing UK-based Executive Directors will receive pension contributions of up to 12% of base salary for the defined contribution (DC) scheme or cash in lieu, in line with the level for new joiners across the UK wider workforce • John Pettigrew’s and Andy Agg’s pension cash allowance will be 12% from 1 April 2022 Annual Performance Plan (APP) • No change • Proposed measures for 2022/23: – Group RoE (35%) – Underlying EPS (35%) – Operational measures – Customer, Colleagues, Diversity (15%) – Individual objectives (15%) Long-Term Performance Plan • No change to opportunity levels, vesting period and holding period • Financial measures to comprise at least 60% of the LTPP; introduction of an ESG measure expected to make up 20% of the LTPP • Flexibility to set a mix of financial, strategic and ESG measures and weightings every year • In the event of future proposals to make material changes to measures/weightings, the Committee will engage with shareholders as appropriate • Proposed measures for 2022/23: – Cumulative three-year Underlying EPS (40%) – Group RoE (40%) – Net zero transition measures (20%) Shareholding requirements • No change Malus and Clawback • Enhanced wording to reflect the corporate governance changes and market practice NED fees • Simplified structure to have one standard base fee for US and UK based NEDs • Provides flexibility to reflect additional responsibilities where these are material to the roles • Alignment of NED fees to market rates (see page 131) 113 C o rp o rate G o vernance National Grid plc Annual Report and Accounts 2021/22 25_Remco_At_a_Glance_p111_113_v46.indd 113 27/05/2022 17:28

2021/22 Remuneration Implementation Single Total Figure of Remuneration – Executive Directors The following table shows a single total figure in respect of qualifying service for 2021/22, together with comparative figures for 2020/21. All figures shown as £’000’s: John Pettigrew Andy Agg Nicola Shaw¹ 2022 2021 2022 2021 qualifying service as Executive Director – 1 April ’21 to 26 July ’21 27July ’21 to 31 March ’22 2022 (Total) 2021 Salary 1,047 1,029 665 624 181 391 571 562 Benefits in kind 101 110 22 32 4 14 18 15 Pension 245 275 133 125 42 91 134 150 Total fixed pay 1,393 1,414 820 781 227 496 723 727 APP 1,116 1,035 717 618 359 refer to APP note 359 537 LTPP 3,997 2,918 1,980 805 1,765 refer to LTPP note 1,765 1,364 Total variable pay 5,113 3,953 2,697 1,423 2,124 – 2,124 1,901 Total remuneration 6,506 5,367 3,517 2,204 2,351 496 2,847 2,628 Notes: 1. Nicola Shaw stood down from the Board on 26 July 2021 and stayed with the Company until after the conclusion of the RIIO-T2 CMA appeal process and continued as Chair of the Company’s subsidiaries, National Grid Electricity Transmission plc and National Grid Gas plc. She remained in active employment until 31 October 2021, after which she was not eligible for the 2021/22 APP and received salary and benefits until her final employment date of 30 April 2022 as per the terms of her contract. For reporting purposes, we have presented the complete APP and LTPP amount in the qualifying service column. Please refer to the APP note below for reference amounts for the respective period. Salary: As of 1 July 2021, John Pettigrew and Nicola Shaw were each awarded a salary increase of 2.3% in line with the wider workforce increase. Andy Agg was awarded an increase of 6.5% as part of a multi-year plan to progressively align his salary with the market rate for his role since his appointment in January 2019. Benefits in kind: Benefits in kind (BIK) include private medical insurance, life assurance, a fully expensed car or cash alternative and the use of a car and a driver when required. For John Pettigrew, the use of a car and driver amounted to approximately £85,500 for 2021/22 (and approximately £89,000 for 2020/21). There were no Sharesave options granted to any Executive Directors during 2021/22. Pension: Pension contributions/cash in lieu for John Pettigrew and Nicola Shaw are 23.4% of salary for 2021/22 and 20% of salary for Andy Agg. Contributions will fall to 12% of salary for all Executive Directors from 1 April 2022. APP: Nicola Shaw’s APP is pro-rated for her period of active employment for 2021/22, i.e. 1 April 2021 to 31 October 2021. For reference, the pro-rated APP for the qualifying service as an Executive Director (1 April 2021 to 26 July 2021) is 55% of the total amount (i.e. circa £197,000 of the total amount of £359,000) and remaining 45% (i.e. circa £162,000 of the total amount of £359,000) for the period 27 July 2021 to 31 October 2021. Details on her financial, operational and individual objective assessment can be found on page 115 − 116. LTPP: The 2019 LTPP is due to vest in July 2022. The average share price over the three months from 1 January 2022 to 31 March 2022 of 1,098.09 pence has been applied and estimated dividend equivalents are included. The 2020/21 LTPP figures have been restated to reflect the actual share price on vesting and all dividend equivalent shares. As the vesting share price of 930.43 pence was higher versus the estimate of 855.04 pence (and the additional dividend equivalent shares added for the dividend with a record date of 4 June 2021 with a dividend rate of 32.16 pence per share), the actual value at vesting was circa £296,000, £82,000 and £138,000 higher than for the estimate published last year for John Pettigrew, Andy Agg and Nicola Shaw, respectively. Nicola Shaw’s 2019 LTPP will vest at the normal vesting dates 1 July 2022 subject to performance conditions and is pro-rated for time served to the date of 30 April 2022 in accordance with plan rules. Impact of share price change: The 2019 LTPP awards were granted on 28 June 2019 with a share price of 834.11 pence. The impact of share price change for the 2019 LTPP, comparing share price at grant versus the average share price for the period 1 January 2022 to 31 March 2022 of 1,098.09 pence, is an increase of 263.98 pence (31.6%) per share compared with an increase of 2.1% for the 2018 LTPP performance period (excluding dividends). Total pension benefits Andy Agg, John Pettigrew and Nicola Shaw received a cash allowance in lieu of participation in a pension arrangement. There are no additional benefits on early retirement. The values of these benefits received during this year, are shown in the single total figure of remuneration table. John Pettigrew has also accrued defined benefit (DB) entitlements; he opted out of the DB scheme on 31 March 2016 with a deferred pension and lump sum payable at his normal retirement date of 26 October 2031. At 31 March 2022, John Pettigrew’s accrued DB pension was reduced to £85,409 per annum and his accrued lump sum was £256,225. These figures reflect a permanent change in John Pettigrew’s pension entitlements going forward. No additional DB entitlements have been earned over the financial year, other than an increase for price inflation due under the pension scheme rules and legislation. Under the terms of the pension scheme, if John Pettigrew qualifies for ill-health requirements, or is made redundant, a pension may be payable earlier than his normal retirement date. A lump sum death in service benefit is also provided in respect of these DB entitlements. 2021/22 Annual Performance Plan APP awards reward delivery against annual financial, operational and strategic performance targets and goals. For 2021/22, financial measures represent 60% of the award, operational measures 20%, and individual objectives the remaining 20% of the maximum. Payment of the APP award is made in shares (50% of the award) and cash (50% of the award). Shares (after any sales to pay associated tax) must be retained until the shareholding requirement is met, and in any event for a minimum of two years after receipt. For financial measures, threshold, target and stretch performance levels are set by the Committee for the performance period and pay out at 0%, 50% and 100% of the maximum calculated on a straight-line basis. Operational measures have been assessed on a four-point scale (not met, partially achieved, achieved and over-achieved) based on quantitative targets set at the beginning of the year by the Committee. Target and stretch performance levels for the individual objectives are also predetermined by the Committee for the performance period, and an assessment of the performance relative to the target and stretch performance levels is made at the end of the performance year on each objective. Executive Directors have a maximum opportunity of 125% of base salary. 114 National Grid plc Annual Report and Accounts 2021/22 Content contained within a blue box indicates that all the information in the panel is audited. Directors’ Remuneration Report continued Statement of implementation of Remuneration Policy in 2021/22 26_Remco_Policy_p114_131_v87.indd 114 27/05/2022 17:29

APP – Financial performance The Group delivered strong financial performance in the year whilst also executing a complex set of portfolio transactions. Investment in critical infrastructure remained strong, with capital investment (continuing) of £6.7 billion driving asset growth of 8.7%. The businesses delivered solid earnings and returns, in particular in our UK Electricity and Gas Transmission and Metering businesses. The financial performance outcomes of the 2021/22 APP awards are summarised in the tables below: Measure Weighting (% of APP) Threshold Target Stretch Outcome (% of max) Group Underlying EPS (pence per share) 30% 72.0 75.0 78.0 78.0% 76.7 Group RoE (%) 30% 9.8% 10.2% 10.6% 100.0% 11.4% Total financial outturn 89.0% Denotes an ‘alternative performance measure’ as described on pages 268 − 279 Notes: Underlying EPS: Technical adjustments have been made to increase the performance range (each of the threshold, target and stretch) by 1.6 pence to reflect the net effect of currency adjustments, US pension assumptions, and scrip issuance. Financial targets were set to include the impacts of the portfolio transactions, specifically the addition of WPD to the Group. Group underlying EPS of 76.7 pence includes 11.4 pence from UK Gas Transmission discontinued operations, and excludes timing and major storm costs as outlined on page 271 in the Financial Results. Nicola Shaw: The total financial outturn for Nicola was 96.3% of maximum based on performance against equally weighted measures (20% each) of UK RoE (outcome of 100% of max), UK underlying operating profit (outcome of 100% of max) and UK regulated controllable costs (outcome of 88.9% of max). Technical adjustments were applied to UK operating profit for the impact of CPI on revenues. The UK outturn is based on an equal weighting of the UK Electricity Transmission and UK Gas Transmission and Metering businesses. APP – Operational performance The operational measures (20%) of the 2021/22 APP were weighted equally between two key objectives – 1) effective completion of the Group portfolio transactions (10%); and 2) quantifiable ESG measures to reduce factors relating to Scope 1 direct carbon emissions and improve employee diversity. Operational measures were assessed on a four-point scale (not met, partially achieved, achieved and over-achieved) based on quantifiable targets where possible and qualitative outcomes to reflect a balanced assessment of performance. All ESG measures were evaluated against quantifiable targets which are aligned to our RBC commitments. Measure Details Assessment Outcome Transactions (10%) Effective management to the satisfaction of the Board: • WPD transaction • Sale and separation of UK GT • Separation of RI WPD: New operating model design, embedded culture and values, maintained business continuity and performance. UK GT: Successfully secured sale of 60% stake of the business, alongside strong business performance delivery. RI: Well-executed separation process, plans in place to mitigate or offset all stranded costs, transaction to complete in 2022/23 4 Over-achieved 3 Achieved 3 Achieved Outcome – Transactions (10/12) 83.33% Group wide Scope 1 carbon emissions (5%) Reduce Group-wide CO2 impact from: • Vehicle fleet (68 Light Duty Vehicles (LDVs) converted) • Business air travel (<11,961,416 airmiles or 5 KT CO2e) Reduce network carbon emissions from: • SF6 emissions (21.8 KT CO2e reduction) • Leak prone pipe (10.811 KT CO2e avoided) • Emission leaks and compressor cab venting (4.4 KT CO2e reduction) Met and/or exceeded performance targets for four out of the five emissions measures most notably: • Business air travel (5,553,932 airmiles or 1.2 KT CO2e) • SF 6 emissions (71 KT CO2e reduction) • Leak prone pipe replacement (10.853 KT CO2e avoided) • Compressor cab venting emissions reduction (18 KT CO2e) • Fleet emission reductions just behind target measure with 62 LDVs converted 3 Achieved Diversity (5%) Deliver sustainable improvement in gender and ethnic diversity in line with key targets in our RBC • New hire rates • Promotion rates • Leaver rates • Strategic leadership group (SLG), (top ~110 leaders) • New talent diversity Improved diversity in six of the eight Group-wide measures most notably: • Exceeded new hire targets (28% and 30%) for gender and ethnicity • Improved SLG diversity to 48% (target of 46%) • Increased new talent diversity to 57.7% (target of 50%) • Gender and ethnic leaver rates fell short of targets and remain a further focus area for 2022/23 Progress underpinned by robust delivery of a Group-wide DEI strategy. 3 Achieved Outcome – ESG (6/8) 75.00% Combined operational outcome 79.17% Notes: Diversity is defined as colleagues who have identified themselves of varying gender, sexual orientation, disability, under-represented racial and/or ethnic group. 115 C o rp o rate G o vernance National Grid plc Annual Report and Accounts 2021/22 26_Remco_Policy_p114_131_v87.indd 115 27/05/2022 17:29

APP – Individual objectives In addition to the financial and operational goals previously discussed, the Board approves annual individual performance goals for the Executive Directors in line with key operational and strategic priorities. Performance is assessed at the end of the financial year by the Board and Remuneration Committee. The CEO completed a self-evaluation which was shared with members of the Board for their comments. The Chair compiled these comments, and based on these comments, proposed a scoring for each of the goals. The CEO undertook the same process for the other Executive Directors and presented his recommendations to the Committee in May 2022. The table below sets out the 2021/22 individual objectives together with associated performance commentaries and the Committee’s assessment of the performance outcome for each of the Executive Directors: Individual objectives and performance summary – John Pettigrew Outcome Execute on the announced portfolio repositioning and deliver results on organisational streamlining • Successful execution of the strategic pivot to electricity; purchase of WPD • Effective management of divestitures and transition of WPD into the Group whilst ensuring solid business performance/continuity • Progression and development of the Company’s long-term strategic blueprint 80% Demonstrate substantial progress in modernising how the Group works, enhancing a culture of accountability • Demonstrated progress in shifting the Group’s culture, with a strong focus on DEI and positive employee satisfaction results • Made progress to improve bench strength of senior leadership group and Group Executive team Raise the level of engagement with the public, communities and government • COP26 and Capital Markets Day – repositioned National Grid across key stakeholder groups as a critical part of the energy transition • Strengthened governmental, public and community relations, and key relationships in particular at the local level Individual objectives and performance summary – Andy Agg Outcome Successfully execute the portfolio repositioning • Effectively managed financing strategy and credit ratings approach for the acquisition of WPD • Strong execution of portfolio repositioning; divestment of 60% stake in UK Gas Transmission, 50% stake in St William Homes LLP • Successfully ensured the mitigation of all stranded costs resulting from the portfolio transactions 85% Demonstrate progress in the Group-wide and Finance transformation programmes • Strong leadership across the Group driving in-year delivery and progression of £400 million of cost efficiencies per annum by the end of 2023/24 • Delivered solid progress against key transformation milestones, advanced key process and technology enabled efficiencies • Improved talent, succession potential, and capabilities within the CFO function Deliver enhanced investor engagement programme • Successfully engaged investors on the five-year investor framework and strategic pivot to electricity with positive feedback/sentiment • Increased transparency of our responsible business strategy yielding positive engagement and external ESG company ratings Individual objectives and performance summary – Nicola Shaw Outcome Successfully execute on UK businesses priorities • Effectively managed UK businesses to deliver on track mid-year financial performance for first year of RIIO-T2 • Successfully implemented operating model to stand up separate Electricity and Gas Transmission UK businesses 65% Deliver a successful Competition & Markets Authority outcome • Led process to submit all RIIO-T1 reopeners with Ofgem • Managed and executed the CMA process effectively; with a positive result on the out-performance wedge Grow National Grid’s positioning on the UK’s net zero future • Established East Coast asset investment strategy to facilitate connection of 40+ GW of offshore renewables by 2030 • Fostered strong relationships with key stakeholders to lay the groundwork for the development of net zero investment roadmap 2019 Long-Term Performance Plan award The 2019 LTPP that will vest on 1 July 2022 was structured as outlined below in consideration of the transition to RIIO-T2 in the UK during the performance period. The financial measures and weightings of the 2019 LTPP below are the same for all Executive Directors. • Group RoE over a two-year period (2019/20 − 2020/21) determines one third of the award • Group Value Growth over the three-year period (2019/20 − 2021/22) determines two thirds of the award The outturns of the 2019 LTPP reflect solid business performance over the three-year period, and are summarised below: Performance measure Weighting Threshold 20% vesting Maximum 100% vesting Actual % of maximum Group RoE 33.33% 11.0% 12.5% 22.67%11.1% Group Value Growth 66.67% 10.0% 12.0% 100.00%12.7% Overall vesting outcome 74.22% Denotes an ‘alternative performance measure’ as described on pages 268 − 279 As disclosed in last year’s DRR, the Group Value Growth measure in 2019 includes an upward adjustment versus the reported measure to reflect the value added from the sale of the residual interest in the UK Gas Distribution business and to adjust for the revised timing of UK cash tax payments. The Committee decided not to reflect upward adjustments to Group RoE or Group Value Growth for prior years (+0.3% in 2019/20 and +0.2% in 2020/21) resulting from the revisions described in note 1F to the consolidated financial statements in 2020/21 into the 2019 LTPP. 116 National Grid plc Annual Report and Accounts 2021/22 Directors’ Remuneration Report continued Statement of implementation of Remuneration Policy in 2021/22 continued 26_Remco_Policy_p114_131_v87.indd 116 27/05/2022 17:29

2019 LTPP Vesting The 2019 LTTP vesting reflects both the final performance outturn and the impact share price and dividends from the time of issue to vesting date. For the 2019 award, the share price appreciation represents a material proportion of the total vesting value. The 2019 LTPP awards were granted on 28 June 2019 with a share price of 834.11 pence. Comparing the share price at grant versus the average share price for the period 1 January 2022 to 31 March 2022 of 1,098.09 pence, yields a share price gain for the 2019 LTPP of 263.9 pence (31.6%) per share in addition to estimated dividend yield of 148.7 pence per share. The amounts due to vest under the 2019 LTPP for the performance period that ended on 31 March 2022 which are included in the 2021/22 single total figure table on page 114, are shown in the table below. The current share price valuation is an estimate based on the average share price over the three months from 1 January 2022 to 31 March 2022 of 1,098.09 pence and the proposed dividend with record date of 6 June 2022, subject to shareholder approval, is included. The total value of awards vesting and dividend equivalent shares are subject to a two-year holding period. Shares awarded Performance outcome (% of maximum) Vested shares based on performance Face value of the award at grant (£’000s) Share price appreciation (£’000s) Dividend equivalent shares (£’000s) Total value (£’000s) John Pettigrew 431,969 74.22 320,607 2,674 846 477 3,997 Andy Agg 213,999 74.22 158,830 1,325 419 236 1,980 Nicola Shaw¹ 190,739 74.22 141,566 1,181 374 211 1,765 1. Nicola Shaw’s 2019 LTPP will vest at the normal vesting date of July 2022 subject to performance conditions. The amount shown under ‘Shares awarded’ is pro-rated for time served to the termination date of 30 April 2022 in accordance with the plan rules. Assessment of National Grid shareholder returns The figure below outlines National Grid plc’s 10-year annual TSR performance against the FTSE 100 Index since 31 March 2012 and illustrates the growth in value of a notional £100 holding invested in National Grid on 31 March 2012, compared with the same invested in the FTSE 100 Index. The FTSE 100 Index has been chosen because it is a widely recognised performance benchmark for large companies in the UK and it is a useful reference to assess relative value creation for National Grid shareholders. Over the last 10-year period, National Grid’s relative TSR is 194% versus the FTSE 100 at 82% demonstrating sustainable long-term value for our shareholders. Over the more recent three-year performance period for the 2019 LTPP, National Grid’s relative TSR was 52% versus the FTSE 100 relative TSR of 13%, which underscores the strong alignment of our Remuneration Policy with the value delivered for our shareholders. 31/3/12 100.00 100.00 122.88 143.95 159.98 186.07 199.42 161.74 193.11 204.03 208.61 293.91 113.80 121.57 130.70 121.43 151.08 151.26 160.67 164.84 161.46 182.16 31/3/13 31/3/14 31/3/15 31/3/16 31/3/17 31/3/18 31/3/19 31/3/20 31/3/21 31/3/22 300 250 200 150 100 50 National Grid FTSE 100 IndexTotal Shareholder Return (£) V al ue o f hy p o th et ic al £ 10 0 ho ld in g Data source: Datastream by Refinitiv Notes: The TSR level shown at 31 March each year is the average of the closing daily TSR levels for the 30-day period up to and including that date. It assumes dividends are reinvested. 2021 Long-Term Performance Plan 2021 LTPP performance conditions As disclosed in last year’s DRR, we reverted to equal weighting for Group RoE and Group Value Growth, measured over the entire three-year performance period, for the 2021 LTPP. Below are the performance ranges for the two measures in the 2021 LTPP. As noted, setting of targets was delayed to enable proper consideration of the portfolio transactions for WPD, UK Gas Transmission, and the US Rhode Island businesses. Performance measures Weighting Threshold 20% vesting Maximum 100% vesting Group RoE 50% 9.75% 11.00% Group Value Growth 50% 9.25% 11.00% Notes: Vesting between threshold and maximum will be on a straight-line basis. The calculation for the Group RoE measure will reflect the updated methodology from 2021/22 going forward as outlined on page 277 of the Annual Report. 117 C o rp o rate G o vernance National Grid plc Annual Report and Accounts 2021/22 26_Remco_Policy_p114_131_v87.indd 117 27/05/2022 17:29

2021 LTPP (conditional awards) made during the year The face value of the awards are calculated using the volume weighted average share price at the date of grant. The share price at the date of grant on 28 June 2021 was 924.68 pence. The 2021 LTPP grant will vest on 1 July 2024. The total value of awards vesting and dividend equivalent shares are subject to a two-year holding period following vesting. Basis of award (% of base) Number of shares Face value (£’000) Proportion vesting at threshold performance Performance period end date John Pettigrew 350% 398,568 £3,686 20% 31 March 2024 Andy Agg 300% 218,993 £2,025 20% 31 March 2024 Statement of Directors’ shareholdings and share interests The Executive Directors are required to build up and hold a shareholding from vested share plan awards. The following table shows the position of each of the Executive Directors in relation with the shareholding requirement and the number of shares owned by the Non-executive Directors, including connected persons. The shareholding is as of 31 March 2022 and the salary used to calculate the value of the shareholding is the gross annual salary as of 31 March 2022. John Pettigrew continues to meet his shareholding requirement. Andy Agg, who was appointed the CFO in 2019, has not yet met his shareholding requirement and is expected to do so in 2023. The projections assume on-target performance/vesting outcomes. They will not be allowed to sell shares, except for covering associated tax liabilities, until their individual shareholding requirements are met. Non-executive Directors do not have a shareholding requirement. Further shares have been purchased in each of April and May 2022 on behalf of each of John Pettigrew and Andy Agg via the Share Incentive Plan (an HMRC tax-advantaged all-employee share plan), thereby increasing the beneficial interests by 25 shares (12 in April and 13 in May) for John Pettigrew and 24 shares (12 each in April and May) for Andy Agg. There have been no other changes in Directors’ shareholdings between 1 April 2022 and 19 May 2022. The expected vesting dates for the conditional share awards subject to performance conditions are 1 July 2022, 3 July 2023 and 1 July 2024 for the 2019 LTPP, 2020 LTPP and 2021 LTPP respectively. Directors Share ownership requirements (multiple of salary) Number of shares owned outright (including connected persons) Value of shares held as a multiple of current salary Number of options granted under the Sharesave Plan Conditional share awards subject to performance conditions (LTPP 2019, 2020, and 2021) Executive Directors John Pettigrew 500% 1,052,126 1,097% 4,219 1,235,754 Andy Agg 400% 216,807 353% 4,316 646,787 Non-executive Directors Liz Hewitt – 2,500 – – – Jonathan Dawson – 45,632 – – – Amanda Mesler – 1,500 – – – Earl Shipp (ADSs) – 1,000 – – – Anne Robinson (ADSs) – – – – – Tony Wood – – – – – Martha Wyrsch (ADSs) – 5,000 – – – Ian Livingston – 1,838 – – – Jonathan Silver (ADSs) – – – – – Paula Rosput Reynolds (ADSs) – 2000 – – – Thérèse Esperdy (ADSs) – 1587 – – – Notes: John Pettigrew: On 31 March 2022, John Pettigrew held 4,219 options granted in previous years under the Sharesave Plan with an exercise price of 711 pence per share and they can, subject to their terms, be exercised at 711 pence per share between 1 April 2025 and 30 September 2025. The number of conditional share awards subject to performance conditions is as follows: 2019 LTPP: 431,969; 2020 LTPP: 405,217; 2021 LTPP: 398,568. Andy Agg: On 31 March 2022, Andy Agg held 4,316 options granted in previous years under the Sharesave Plan with an exercise price of 695 pence per share and they can, subject to their terms, be exercised at 695 pence per share between 1 April 2026 and 30 September 2026. The number of conditional share awards subject to performance conditions is as follows: 2019 LTPP: 213,999; 2020 LTPP: 213,795; 2021 LTPP: 218,993. Earl Shipp, Jonathan Silver, Paula Rosput Reynolds, Martha Wyrsch, Anne Robinson and Thérèse Esperdy: Holdings are shown as American Depositary Shares (ADSs). Each ADS represents five ordinary shares. Post-employment shareholding requirements Past Executive Directors are required to continue to hold their shares/ADSs in line with our current and proposed Directors’ Remuneration Policy. To enforce this, the Executive Directors have agreed to give permission for the Company to periodically check with its third-party share scheme administrator whether the minimum shareholding requirement is being maintained. The Executive Directors have acknowledged that if they breach their post-employment shareholding requirement for any reason, the Company may enforce at its discretion one or more of the following processes: to request they repay to the Company an amount equivalent in value to the shareholding requirement that has not been met; the Company may withdraw/vary the vesting of any future shares granted under the LTPP; the Company may publish a public statement in a form, as the Company may decide that the Director has failed to comply with the post-employment shareholding requirement. Executive Directors are reminded annually, when employed, of the post-employment shareholding requirement. At termination, the minimum shareholding requirement is confirmed to the Director and checks are made by the Company at the 12-month and 24-month anniversary of leaving and at the financial year-end 31 March to ascertain if their post-employment shareholding requirement has been met. 118 National Grid plc Annual Report and Accounts 2021/22 Directors’ Remuneration Report continued Statement of implementation of Remuneration Policy in 2021/22 continued 26_Remco_Policy_p114_131_v87.indd 118 27/05/2022 17:29

Nicola Shaw stood down from the Board on 26 July 2021 and remained subject to an in-employment shareholding requirement until her final employment date of 30 April 2022, at which time she will be subject to a post-employment shareholding requirement of 200% of base salary for a period of two years. As of 31 March 2022, Nicola Shaw continues to meet her in-employment shareholding requirement. Shareholder dilution The Company has a number of multiple all-employee share plans that provide employees the opportunity to become shareholders. These plans include Sharesave and the Share Incentive Plan (SIP) in the UK and the 401(k) and Employee Stock Purchase Plan in the US. Where shares may be issued or treasury shares reissued to satisfy incentives, the aggregate dilution resulting from executive share-based incentives will not exceed 5% in any 10-year period. Dilution resulting from all incentives, including all-employee incentives, will not exceed 10% in any 10-year period. The Committee reviews dilution levels against these limits annually and under these limits the Company, as at 31 March 2022, had a headroom of 3.9% and 7.8% respectively. CEO pay ratio We have disclosed our CEO pay ratios comparing the CEO single total figure of remuneration to the equivalent pay for the 25th quartile, median, and 75th quartile UK employees (calculated on a full-time equivalent basis), as well as the median Group-wide pay ratio. CEO Pay Ratios 2021/22 to 2018/19 UK Group-wide Year Method 25th percentile pay ratio Median pay ratio 75th percentile pay ratio Median pay ratio 2021/22 Option A 135:1 105:1 81:1 76:1 2020/21 Option A 104:1 81:1 62:1 54:1 2019/20 Option A 111:1 86:1 66:1 53:1 2018/19 – voluntary Option A 96:1 76:1 58:1 48:1 Notes: Following the completion of the WPD acquisition in June 2021, this year’s CEO pay ratio includes circa 6,600 UK WPD employees in the data set. Salaries as at 31 March 2022 and estimated performance-based annual payments for 2021/22 have been annualised for part-time employees to reflect full-time equivalents. Performance payments have not been further adjusted to compensate where new employees have not completed a full performance year. The comparison with UK employees is specified by the Companies (Miscellaneous Reporting) Regulations 2018 (as amended). US employees represent approximately 56% of our total employees. Our median pay ratio on a Group-wide basis is 76:1, calculated on the same basis as the UK pay ratios and at an exchange rate of $1.348:£1. The CEO pay ratio has increased to 105:1 at the UK median. The increase is explained by the increase in the CEO’s single total figure of remuneration primarily due to the impact of the 2019 LTPP performance driven in part by the impact of share price growth of 31.6% over the three-year performance period and strong long-term business performance delivery. For reference, the impact of share price change for the 2019 LTPP, comparing share price at grant versus the average share price for the period 1 January 2022 to 31 March 2022 of 1,098.09 pence, for each Executive Director is an increase of 263.98 pence (31.6%) per share excluding the dividend (versus an increase of 2.1% for the 2018 LTPP). This year the 2019 LTPP vesting represents circa 61% (last year 54%) of the CEO’s single total figure of remuneration. Excluding estimated 2019 LTPP vesting, our UK median pay ratio is 40:1 (last year 39:1). On a Group basis, the median pay ratio has increased to 76:1. The lower Group median pay ratio reflects the higher level of wages in the regions of the US where we operate as compared with the UK. Nearly 56% of our employees are US-based. Excluding estimated 2019 LTPP vesting, the Group- wide median pay ratio is 29:1. These results highlight a key feature of our remuneration strategy to weight Executive and senior leadership compensation more heavily towards longer-term performance share based reward. Across the wider workforce, employee compensation is largely focused on in-year annual delivery. The 2021/22 base pay and total pay including benefits for the CEO versus UK workforce is shown below. 2021/22 Base pay and benefits – CEO, UK wider workforce UK Pay and benefits data CEO remuneration UK employee 25th percentile UK employee 50th percentile UK employee 75th percentile Base salary £1,047,115 £36,598 £42,054 £55,726 Total pay and benefits £6,505,511 £48,038 £61,834 £80,297 119 C o rp o rate G o vernance National Grid plc Annual Report and Accounts 2021/22 26_Remco_Policy_p114_131_v87.indd 119 27/05/2022 17:29

Flexibility is provided to adopt one of three methods for calculating the ratios. We have chosen Option A, which is a calculation based on the pay of all UK employees on a full-time equivalent basis, as this option is considered to be more statistically robust. The ratios are based on total pay and benefits inclusive of short-term and long-term incentives applicable for the respective financial year 1 April – 31 March. The reference employees at the 25th, 50th and 75th percentile have been determined by reference to pay and taxable benefits as at the last day of the respective financial year, 31 March, with estimates for the respective APP payouts and performance outcomes of the LTPP and dividend equivalents. Most employees are eligible for a performance-based annual payment. Our principles for pay setting and progression in our wider workforce are the same as for our executives – mid-market approach to total reward sufficiently competitive to attract and retain high-calibre individuals without over-paying and providing the opportunity for individual development and career progression. The pay ratios reflect how remuneration arrangements differ, as accountability increases for more senior roles within the organisation, and in particular the ratios reflect the weighting towards long-term value creation and alignment with shareholder interests for the CEO. We are satisfied that the median pay ratio reported this year is consistent with our wider pay, reward and progression policies for employees. The median reference employee falls within our collectively bargained employee population and has the opportunity for annual pay increases, annual performance payments and career progression and development opportunities. The CEO received a pay increase of 2.3% in 2021/22 in line with the increase budget awarded across the UK employee population (no increase was granted in 2020/21). Relative importance of spend on pay The chart below shows the relative importance of spend on pay compared with other costs and disbursements (dividends, tax, net interest and capital expenditure). Given the capital-intensive nature of our business and the scale of our operations, these costs were chosen as the most relevant measures for comparison purposes. All amounts exclude exceptional items and remeasurements. Relative importance of spend on pay Payroll costs Dividends Tax Net interest Capital expenditure +9% 1,622 1,770 +6% 1,742 1,852 +100% 334 669 +25% 865 1,081 +31% 4,727 6,185 2020/21 £m 2021/22 £m Notes: 1. The dividend figure for 2020/21 has been restated at £1,742 million (from £1,738 million) to reflect the actual value of dividends paid. 2. 2020/21 payroll costs, tax, net interest and capital investment have been re-presented to reflect the classification of the UK Gas Transmission business as a discontinued operation. 3. Percentage increase/decrease of the costs between years is shown. Chief Executive’s pay in the last ten financial years Steve Holliday was CEO throughout the five-year period from 2012/13 to 2015/16. John Pettigrew became CEO on 1 April 2016. Steve Holliday John Pettigrew 12/13 13/14 14/15 15/16 16/17 17/18 18/19 19/20 20/21 21/22 Single total figure of remuneration (£’000) 3,170 4,801 4,845 5,151 4,623 3,648 4,651 5,205 5,367 6,506 Single total figure of remuneration including only 2014 LTPP (£’000) 3,931 APP proportion of maximum awarded 55.65% 77.94% 94.80% 94.60% 73.86% 82.90% 84.20% 70.58% 80.43% 85.20% PSP/LTPP (proportion of maximum vesting) 25.15% 76.20% 55.81% 63.45% 90.41% 85.20% 84.20% 84.90% 68.00% 74.22% Notes: John Pettigrew: Single total figure for 2021/22 is explained in the single total figure of remuneration table for Executive Directors and single total figure for 2020/21 has been restated to reflect actual share price for 2018 LTPP vesting in 2021 and all dividend equivalent shares, consistent with comparative figures shown in this year’s single total figure of remuneration table. 2014 LTPP: The 2016/17 single total figure of remuneration includes both the 2013 LTPP award and the 2014 LTPP award due to a change in the vesting period of four years (2013 LTPP) to three years (2014 LTPP). PSP/LTPP plans: Prior to 2014, LTPP awards were made under a different LTI framework which incorporated a four-year performance period for the RoE element of the awards. The last award under this framework was made in 2013 and was fully vested in 2017. Awards made from 2014 are subject to a three-year performance period. The first of these awards vested in 2017. 120 National Grid plc Annual Report and Accounts 2021/22 Directors’ Remuneration Report continued Statement of implementation of Remuneration Policy in 2021/22 continued 26_Remco_Policy_p114_131_v87.indd 120 27/05/2022 17:29

Single total figure of remuneration – Non-executive Directors The following table shows a single total figure in respect of qualifying service for 2021/22, together with comparative figures for 2020/21: Fees £’000 Other emoluments £’000 Total £’000 2021/22 2020/21 2021/22 2020/21 2021/22 2020/21 Paula Rosput Reynolds 599 21 18 0 616 21 Sir Peter Gershon Resigned on 31.05.2021 90 540 12 82 102 622 Jonathan Dawson 108 112 3 1 111 113 Thérèse Esperdy 141 142 10 0 151 142 Paul Golby Resigned on 26.07.2021 33 104 2 1 35 105 Liz Hewitt 113 99 9 0 122 99 Ian Livingston Appointed on 01.08.2021 66 n/a 1 n/a 67 n/a Amanda Mesler 93 91 2 0 94 91 Earl Shipp 113 104 7 0 120 104 Jonathan Silver 99 104 9 0 109 104 Mark Williamson Resigned 31.12.2021 87 122 3 0 90 122 Tony Wood Appointed on 01.09.2021 48 NA 2 n/a 50 NA Martha Wyrsch Appointed on 01.09.2021 56 NA 3 n/a 59 NA Anne Robinson Appointed on 19.01.2022 19 NA 0 n/a 19 NA Total 1,665 1,439 81 84 1,745 1,523 Notes: Receiving the US-based Board fee: Thérèse Esperdy, Earl Shipp, Jonathan Silver, Anne Robinson and Martha Wyrsch. Receiving the UK-based Board fee: Jonathan Dawson, Paul Golby, Liz Hewitt, Amanda Mesler, Mark Williamson, Ian Livingston and Tony Wood. Therese Esperdy: Fees include £25,000 for serving on the National Grid USA Board; she stepped down from the National Grid USA Board on 18 November 2021. Paula Rosput Reynolds joined the Board on 1 January 2021 as a Non-executive Director and was appointed as Chair of the Board from 31 May 2021. She is not eligible for any benefits. Other emoluments: In accordance with the Company’s expenses policies, Non-executive Directors receive reimbursement for their reasonable expenses for attending Board meetings. In instances where these costs are treated by HMRC as taxable benefits, the Company also meets the associated tax cost to the Non-executive Directors through a PAYE settlement agreement with HMRC and these costs are included in the table above. For 2020/21 due to COVID-19 travel restrictions, most of the NEDs did not incur travel-related expenses. The total emoluments paid to Executive and Non-executive Directors in the year was £14.2 million (2020/21: £11.7 million). Percentage change in Remuneration (Executive Directors, Non-executive Directors, employee average) In line with the revised Shareholder Rights Directive (2019), we have included percentage change in salary/fee, bonus and benefits for each of the Directors compared to prior years. The regulations cover employees of the Parent Company only and not across the Group, and since we have very few people employed by our Parent Company (National Grid plc), we have voluntarily chosen a comparator group of all employees in the UK and the US to provide a representative comparison. In line with the regulations, we shall build this information to display a five-year history. 2020/21 2021/22 Executive Directors Salary Benefits Bonus Salary Benefits Bonus John Pettigrew 1.3% -4.7% 15.4% 1.7% -8.8% 7.8% Andy Agg 4.9% 40.6% 17.7% 6.5% -31.6% 15.9% Nicola Shaw 1.3% 1.1% 38.8% 1.7% 18.3% -33.1% Non Executive Directors Jonathan Dawson 0.5% 37.1% n/a -3.0% 417.6% n/a Therese Esperdy 0.4% -100.0% n/a -0.8% n/a n/a Sir Peter Gershon 0.5% -5.5% n/a -83.3% -85.0% n/a Paul Golby 0.5% -87.5% n/a -68.5% 213.8% n/a Liz Hewitt 334.8% -100.0% n/a 14.5% n/a n/a Amanda Mesler 0.5% -100.0% n/a 1.6% n/a n/a Paula Rosput Reynolds n/a n/a n/a 2816.8% n/a n/a Earl Shipp 0.5% -100.0% n/a 8.6% n/a n/a Jonathan Silver 14.3% -100.0% n/a -4.2% n/a n/a Mark Williamson -8.6% -100.0% n/a -29.2% n/a n/a Ian Livingston n/a n/a n/a n/a n/a n/a Tony Wood n/a n/a n/a n/a n/a n/a Martha Wyrsch n/a n/a n/a n/a n/a n/a Anne Robinson n/a n/a n/a n/a n/a n/a Employee median -8.49% 1.65% -5.52% 2.8% 6.1% 40% Note: For Nicola Shaw, the 2021/22 data reflects the salary, benefits and bonus paid for the complete year as presented in the single total figure of remuneration table. 121 C o rp o rate G o vernance National Grid plc Annual Report and Accounts 2021/22 26_Remco_Policy_p114_131_v87.indd 121 27/05/2022 17:29

For 2021/22, the percentage change data for salary/fees reflects that, other than for Andy Agg, the salary/fee increases for Directors were 2.3% in line with the wider workforce increases. For 2020/21, the percentage change data for salary/fees reflects that, other than for Andy Agg, there were no salary/ fee increases for Directors. In contrast, the majority of managers and all those covered by trade union agreements were eligible to receive an annual salary increase during 2020/21. The average salary increase budget for the UK and the US employees, subject to performance review, was 2.3% and 2.5% respectively in 2020/21. Budgets vary for employees covered by collective agreements depending on arrangements agreed with the respective trade unions. The Committee takes account of the general salary increase budgets available for managers/non-unionised employees when reviewing Directors’ salaries/fees. Further alignment between Executive Director pay and arrangements available to the wider workforce is evidenced by the approach that all employees have the opportunity to receive a bonus which is linked to either a combination of individual and Company/business performance measures, or Company/ business performance measures only, thus enabling employees as well as the Executive Directors to benefit in the Company’s success annually. Payments for loss of office and payments to past Directors Nicola Shaw stood down from the Board on 26 July 2021 and stayed with the Company until after the conclusion of the RIIO-T2 CMA appeal process and continued as Chair of the Company’s subsidiaries, National Grid Electricity Transmission plc and National Grid Gas plc. She remained in active employment until 31 October 2021, after which she was not eligible for 2021/22 APP and received salary and benefits until her final employment date of 30 April 2022 as per the terms of her contract. Her APP is pro-rated for her period of active employment for 2021/22, i.e. 1 April 2021 to 31 October 2021. Her 2019 LTPP will vest at the normal vesting date of July 2022 subject to performance conditions and is pro-rated for time served to the termination date of 30 April 2022 in accordance with the plan rules. Details of Nicola’s remuneration in relation to the period 1 April 2021 to 26 July 2021 (qualifying service as an Executive Director) and 27 July 2021 to 31 March 2022 is disclosed in the Single Total Figure of Remuneration table on page 114. All payments are in accordance with her service agreement, the Directors’ Remuneration Policy (and in line with our June 2021 Corporate Governance disclosure) and subject to applicable tax withholdings. The Committee agreed to grant good leaver treatment for Nicola’s in-flight LTPP awards given her overall long-term strong performance and contribution to the business. Nicola’s awards under the 2020 LTPP will be pro-rated for completed months held since the award date until 30 April 2022. These awards will vest at the same time as other participants, subject to performance measured at the vesting date and any discretion the Committee may decide to exercise at the time of vesting, in line with our Directors’ Remuneration Policy. These shares will be subject to the two-year post-vesting holding requirement and post-employment shareholding requirement. There have been no payments made to past Directors during 2021/22. External appointments and retention of fees Experience as a board member of another company is considered to be valuable personal development, which in turn is of benefit to the Company. The table below details the Executive Director (at 31 March 2022) who served as non-executive director in other companies during the year ended 31 March 2022: Company Retained fees John Pettigrew Rentokil Initial plc £70,000 Role of Remuneration Committee The Committee is responsible for recommending to the Board the Remuneration Policy for the Executive Directors, the other members of the Group Executive Committee and the Chair, and for implementing this Policy. The aim is to align the Remuneration Policy to the Company strategy and key business objectives, and ensure it reflects our shareholders’, customers’ and regulators’ interests. The Committee receives input on Policy implementation within the wider workforce before reaching decisions on matters such as salary increases and annual incentive payouts and closely reviews the appropriateness of pay positioning by reference to external measures (benchmarking remuneration packages) and internal review of Company performance and pay gaps (CEO pay ratios, gender and ethnicity pay gaps) and from this year, the relativity year-on-year of salary, benefits and annual performance incentives compared with the same for the rest of the workforce. • Clarity: we identify and communicate a range of performance measures in our incentives which clearly link to the successful execution of the Company’s strategy. • Simplicity: elements of our remuneration framework and their purpose are clearly articulated within our market-standard Remuneration Policy and we believe this is understood by all our stakeholders. • Risk: risk is managed in a number of ways and evidenced through our Remuneration Policy, for example: setting maximum levels for incentive plans; implementing measures that are aligned to Company performance and shareholder interests; focusing on the long term and creating value through the LTPP; reviewing formulaic outcomes; malus and clawback provisions; and having a high shareholding requirement for senior executives. • Predictability: full information on the potential values which could be earned are disclosed; our policy outlines threshold, target and maximum opportunity with varying actual incentive outcomes dependent on performance; and all the checks and balances set out above under Risk are disclosed as part of the Remuneration Policy. • Proportionality: whilst incentive plans reward executives’ performance in successfully delivering the business strategy, there is also a focus on sustaining this through holding periods that apply to vested shares and annual incentives paid out as shares; all executives are also subject to significant shareholding and post-employment shareholding requirements. The policy does not reward poor performance and the range of potential payouts under the Policy is appropriate. • Alignment to culture and strategy: our culture recognises that how we do things is as vital as what we do and this is reflected in the type of performance conditions used in our incentive plans. Both the measures themselves and the targets set aim to reinforce this approach. Our policy has operated as intended in terms of Company performance and quantum; a review of key considerations and decisions pertaining to its implementation is provided in the Committee Chair’s statement. 122 National Grid plc Annual Report and Accounts 2021/22 Directors’ Remuneration Report continued Statement of implementation of Remuneration Policy in 2021/22 continued 26_Remco_Policy_p114_131_v87.indd 122 27/05/2022 17:29

The Committee’s activities in 2021/22 Meeting/circulations Main areas of discussion April Discussion on 2020/21 expected incentive plan outcomes (APP and outstanding LTPP) for the Group Executive Committee 2020/21 APP individual objective scoring for the Group Executive Committee Discussion on the 2021/22 APP financial and operational measures and LTPP 2021 award for the Group Executive Committee Discussion on the 2021/22 APP strategic objectives for the Group Executive Committee Market data review and base salary increase proposals for the Group Executive Committee May Approval of 2020/21 APP and 2018 LTPP outcomes for the Group Executive Committee Approval of pay decisions for the Group Executive Committee Review and approval of Chair fees Approval of the 2021/22 APP strategic objectives for the Group Executive Committee Approval of LTPP plan rules Items related to Executive Director leaver arrangements and WPD senior management team remuneration arrangements July Approval of 2021/22 APP targets (financial and operational) and 2018 LTPP vesting Debrief of AGM season, remuneration trends and initial discussion for 2022 Remuneration Policy August* Items related to new Group Executive Committee appointment October Approval of 2021 LTPP targets November Approval of the revision to 2021/22 APP targets to incorporate transactions impact Performance update on incentive plans (APP and outstanding LTPP) Items related to various Group Executive Committee members’ (i) leaving arrangements, and (ii) remuneration arrangements Approval of 2021/22 Sharesave plan Review of gender and ethnicity pay gaps January Provisional approval 2022 Remuneration Policy; approval of the consultation plan Items related to various Group Executive Committee members’ (i) leaving arrangements (ii) remuneration arrangements (iii) incentive plan outcomes, and (iv) forward looking objectives February* Review of shareholder letter on proposed Remuneration Policy March AGM season debrief and discussion on feedback from shareholder consultation on 2022 Remuneration Policy Discussion on 2021/22 expected incentive plan outcomes (APP and outstanding LTPP) for the Group Executive Committee 2021/22 APP individual objective scoring for the Group Executive Committee Discussion on the 2022/23 APP financial and operational measures and LTPP 2022 award for the Group Executive Committee Discussion on the 2022/23 APP strategic objectives for the Group Executive Committee Market data review and base salary increase proposals for the Group Executive Committee Approval of proposed amends to Employee Share Schemes Sub-Committee Terms of Reference * By circulation. Advisors to the Remuneration Committee PricewaterhouseCoopers LLP (PwC) was selected by the Committee to become its independent advisor from 3 August 2020 and provided advice and counsel to the Committee throughout the 2021/22 financial year. PwC is member of the Remuneration Consultants Group (RCG) and have signed up to RCG’s code of conduct. The Committee is satisfied that any potential conflicts were appropriately managed. Work undertaken by PwC in its role as independent advisor to the Committee, has incurred fees of £243,500 on the basis of time charged to perform services and deliverables. The Committee reviews the objectivity and independence of the advice it receives from its advisors each year. It is satisfied that PwC provided credible and professional advice. PwC has provided general and technical remuneration services in relation to employees below Board and Group Executive Committee level that include broad-based employee reward support and data assurance services. In addition, Willis Towers Watson (WTW) provided benchmarking support to the Committee in the year and incurred fees of £15,600. The Committee considers the views of the Chair on the performance and remuneration of the CEO, and of the CEO on the performance and remuneration of the other members of the Group Executive Committee. The Committee is also supported by the Group General Counsel & Company Secretary, who acts as Secretary to the Committee; the Chief People & Culture Officer; the Group Head of Reward; and, as required, the CFO, the Group Head of Pensions and Group Financial Controller. Voting on Directors’ Remuneration Policy and the Directors’ Remuneration Report Directors’ Remuneration Policy adopted at the 2019 AGM Directors’ Remuneration Report 2020/21 3% For Against 97% 3% 97% Note: The Directors’ Remuneration Policy voting figures shown refer to votes cast at the 2019 AGM and represent 64.66% of the voting share capital. The Directors’ Remuneration Report voting figures shown refer to votes cast at the 2021 AGM (in respect of the 2019 remuneration policy adopted at the 2019 AGM) and represent 66.73% of the voting share capital. 123 C o rp o rate G o vernance National Grid plc Annual Report and Accounts 2021/22 26_Remco_Policy_p114_131_v87.indd 123 27/05/2022 17:29

124 National Grid plc Annual Report and Accounts 2021/22 2022 Directors’ Remuneration Policy Our Remuneration strategy sets out to ensure strong alignment with our strategic priorities and creation of value for shareholders whilst providing market competitive remuneration to enable the attraction and retention of top leadership talent. Our existing Policy (adopted in 2019) continues to function well, providing remuneration outcomes well aligned to Company performance and our shareholders’ experience. As such, the 2022 Policy, effective July 2022 subject to shareholder approval, incorporates modest refinements to reflect the importance of the Company’s responsible business strategy and ESG goals in both the short and long-term and the increasingly dynamic external context which advantages greater agility and flexibility. We have engaged widely with shareholders and proxy advisory service organisations and are grateful for the engagement, feedback, and positive support on our Policy proposals. The Committee is committed to maintaining an open dialogue and members remain available to answer questions throughout the AGM process and forthcoming year ahead on our 2022 Directors’ Remuneration Policy as outlined below. Policy tables – Executive Directors Element Operation Maximum levels Performance assessment Salary Purpose and link to business strategy: to attract, motivate and retain high-calibre individuals. Salaries are generally reviewed annually and are targeted broadly at the mid-market of our peer group. However, a number of other factors are also taken into account: • business performance and individual contribution; • the individual’s skills and experience; • scope of the role, including any changes in responsibility; • market data, including base pay and total remuneration; and • opportunity in the relevant comparator group. No prescribed maximum annual increase although increases are generally aligned to or below salary increases received by other Company employees and to market movements. Increases in excess of this may be made at the Committee’s discretion in circumstances such as a significant change in responsibility, progression if more recently appointed in the role and alignment to mid-market levels. Not applicable. Benefits Purpose and link to business strategy: to provide competitive and cost effective benefits to attract and retain high-calibre individuals. Benefits currently provided include: • company car or a cash alternative (UK only); • use of a car and driver when required; • private medical insurance; • life assurance; • personal accident insurance (UK only); • opportunity to purchase additional benefits (including personal accident insurance for US) under flexible benefits schemes available to all employees; and • opportunity to participate in HMRC (UK) or Internal Revenue Service (US) tax-advantaged all-employee share plans. UK Sharesave: Monthly contributions from net salary for a period of three or five years. The savings can be used to purchase shares at a discounted price set at the launch of each plan period. Share Incentive Plan: UK employees may use gross salary to purchase shares. These shares are placed in trust. Employee Stock Purchase Plan (ESPP) (423(b) plan): eligible US employees may purchase ADSs on a monthly basis at a discounted price. Other benefits may be offered at the discretion of the Committee. In circumstances where an Executive Director is located outside of the UK, benefits will be set such that they are competitive in the local market. The cost of providing benefits will vary from year to year in line with market. Participation in tax-advantaged all-employee share plans is subject to limits set by relevant tax authorities. Not applicable. Pension Purpose and link to business strategy: to reward sustained contribution and assist in attraction and retention. Externally hired Executive Directors may participate in a DC arrangement or alternatively choose to receive cash in lieu. In cases of internal promotion to the Board, the Company will recognise legacy DB pension arrangements of existing employees in both the UK and US where these have been provided under an existing arrangement. In line with market practice, pensionable pay for UK-based Executive Directors includes base salary only and for US-based Executive Directors it includes base salary and APP awards. UK Directors: DC: annual contributions for new appointments and existing Executive Directors of up to 12% of base salary. Executive Directors may take a full or partial cash supplement in lieu. Life assurance of four times base salary and a dependant’s pension of one third of basic salary is provided. Executives with HMRC pension protection may be offered lump sum life assurance only, equal to four times base salary. US Directors: DC contributions of up to 9% of basic salary plus APP award with additional 401(k) plan match up to 4%. DB: no additional DB entitlements will be earned over the financial years from the date of appointment, other than an increase for price inflation due under the pension scheme rules and legislation. Under the terms of the pension scheme, if the Executive Director satisfies the ill-health requirements, or is made redundant, a pension may be payable earlier than the normal retirement date. A lump sum death in service benefit is also provided in respect of these DB entitlements. Not applicable. None of the current Executive Directors are active members of a defined benefit plan. Directors’ Remuneration Report continued Directors’ Remuneration Policy 26_Remco_Policy_p114_131_v87.indd 124 27/05/2022 17:29

125 C o rp o rate G o vernance National Grid plc Annual Report and Accounts 2021/22 Element Operation Maximum levels Performance assessment Annual Performance Plan Purpose and link to business strategy: to incentivise and reward the achievement of annual financial measures and strategic non-financial measures including the delivery of annual individual objectives and demonstration of our Company leadership qualities and values. The APP comprises reward for achievement against financial and non-financial measures and achievement against individual objectives. Financial and non-financial performance measures and targets are normally agreed at the start of each financial year and are aligned with strategic business priorities. Targets are set with reference to the business plan and strategy. Individual objectives and associated targets are normally agreed also at the start of the year. APP awards are paid in June. At least 50% of the APP award is paid in shares, which (after any sales to pay associated income tax) must be retained until the shareholding requirement is met, and in any event for two years after receipt. Awards are subject to malus and clawback provisions. The maximum award is 125% of base salary in respect of a financial year. The payout levels at threshold, target and stretch performance levels are 0%, 50% and 100%, respectively. In exceptional circumstances, (such as the recruitment of an Executive Director), the Committee has the flexibility to award up to an additional 50% of base salary as incentives and this can be applied across the APP and or LTPP in any given year but for one year only. Therefore, in exceptional circumstances, the annual maximum award opportunity under the annual bonus can be up to 175% of base salary assuming all 50% of the exceptional max is used and allocated to APP. At least 50% of the APP is based on performance against financial measures. The Committee may use its discretion to set financial and non-financial measures that it considers appropriate in each year. Notwithstanding the level of award achieved, the Committee has the discretion to modify the formulaic amount payable, to reflect wider financial and business performance, demonstration of leadership qualities and our values, or to take account of a significant event. Long-Term Performance Plan Purpose and link to business strategy: to drive long-term business performance, aligning Executive Director incentives to key strategic objectives and shareholder interests over the longer term. Awards of shares may be granted each year, with vesting subject to long-term performance conditions. The performance measures which are chosen are those that the Committee believes reflect the creation of long-term value within the business. Targets are set for each award with reference to the business plan and strategy. Participants may receive ordinary dividend equivalent shares on vested shares, from the time the award was made, at the discretion of the Committee. Participants must retain vested shares (after any sales to pay associated income tax) until the shareholding requirement is met, and in any event for a further two years after vesting. Awards are subject to malus and clawback provisions. The normal annual maximum award limits that may be granted are 350% of salary for the CEO and 300% of salary for other Executive Directors. For each performance measure, threshold performance will trigger up to 20% of the award to vest; 100% will vest if maximum performance is attained. In exceptional circumstances (such as the recruitment of an Executive Director), the Committee has the flexibility to award up to an additional 50% of base salary as incentives and this can be applied across the APP or the LTPP in any given year but for one year only. Therefore, in exceptional circumstances, the annual maximum award opportunity can be up to 400% of base salary for a CEO role and 350% of salary for other Executive Directors assuming all 50% of the exceptional max is used and allocated to LTPP. The Committee will review performance measures for each award cycle prior to grant to ensure continued alignment with the Company’s strategy. As such, different performance measures, targets and/or weightings may be set to reflect the business strategy and the regulatory framework operating at that time. Awards have a three-year performance period followed by a two-year holding period post-vesting. Notwithstanding the level of award achieved, the Committee has the discretion to modify the formulaic amount vesting, to reflect wider financial and business performance, demonstration of leadership qualities and our values, or to take account of a significant event. Malus and clawback The Committee has discretion to determine whether exceptional circumstances exist which justify whether any or all of an award should be forfeited, even if already paid. Examples of exceptional circumstances include, but are not limited to: • discovery of a material misstatement resulting in an adjustment in the audited accounts of the Company or any Group company; • the assessment of any performance condition, or condition in respect of a payment or award under the APP or LTPP, that was based on error, inaccurate or misleading information; • the discovery that any information used to determine the APP or LTPP award was based on error, inaccurate or misleading information; • action or conduct of a participant which amounts to fraud or gross misconduct; • event or behaviour of a participant leading to the censure of the Company by a regulatory authority or has had a significant detrimental impact on the reputation of any Group company, provided that the Board is satisfied that the relevant participant was responsible for the censure or reputational damage and that the censure or reputational damage is attributable to the participant; and • a material failure or risk management and/or corporate failure. Where the Committee in its absolute discretion determines that exceptional circumstances exist that justify doing so: • in respect of all or part of an award that has yet to be paid or vested (‘malus’), as applicable, the Committee may determine the award, or part of it, will be forfeited; and • in respect of all or part of an award that has been paid or has vested (‘clawback’), as applicable, the Committee may determine the award, or part of it, will be forfeited and may reclaim an amount considered appropriate through means deemed appropriate to those specific circumstances. APP – cash Malus applies in the year the bonus is earned and clawback for two years thereafter APP – deferred shares Malus applies until the end of two years following the financial year in which the bonus is earned and clawback for two years thereafter LTPP Malus applies up to vesting and clawback during the two-year holding period 26_Remco_Policy_p114_131_v87.indd 125 27/05/2022 17:29

Shareholding requirement – in employment The requirement of Executive Directors to build up and hold a significant value of National Grid shares ensures they share a significant level of risk with shareholders and aims to align their interests. Executive Directors are required to build up and retain shares in the Company. The level of holding required is 500% of salary for the CEO and 400% of salary for the other Executive Directors. Unless the shareholding requirement is met, Executive Directors will not be permitted to sell shares, other than to pay income tax liabilities on shares just vested or in exceptional circumstances approved by the Committee. Shareholding requirement – post employment The requirement of Executive Directors to continue to hold National Grid shares after leaving ensures they continue to share a risk with shareholders and maintain alignment with shareholders’ interests. Executive Directors will be required to hold 200% of base salary calculated at their leaving date, or maintain their actual holding percentage if lower, expressed as a number of shares and held for a period of two years. This calculation excludes the value of any awards not yet vested for ‘good leavers’ that will vest according to the normal schedule and which in any event must be held for a two-year period. The calculation will include recently vested LTPP awards or APP awards paid as shares which are subject to respective two-year holding periods, even after employment. Until the post-employment shareholding requirement is met, Executive Directors will not be permitted to sell shares, other than to pay income tax liabilities on shares just vested or in exceptional circumstances approved by the Committee. Our peer group The Committee reviews its Remuneration Policy against appropriate peer groups annually to make sure we remain competitive in the relevant markets. The primary focus for reward market comparisons is currently the FTSE 11 − 40 for UK-based Executive Directors and US general industry and US energy services companies with similar levels of revenue for US-based Executive Directors. These peer groups are considered appropriate for a large, complex, international and predominantly regulated business. The Committee may amend the peer group and reference other peer groups as deemed appropriate. Policy tables – Non-executive Directors (NEDs) Element Operation Maximum levels Performance metrics, weighting and time period applicable Fees for NEDs Purpose and link to business strategy: to attract NEDs who have a broad range of experience and skills to oversee the implementation of our strategy NED fees (excluding those of the Chair) are set by the Group Executive Committee in conjunction with the Chair. The Chair fees are set by the Committee. Fee structure: • Chair fee (all inclusive); • basic fee; • Committee chair fee; • Committee membership fee; • Senior Independent Director fee; and • additional Board responsibilities. Fees are reviewed every year taking into account those in companies of similar scale and complexity. The Chair is eligible to receive benefits as deemed appropriate and necessary in respect of the role, which may include, for example, private medical and personal accident cover, the use of a company car and driver, and financial advice. NEDs do not participate in incentives, pension or any other benefits. However, they are eligible for reimbursement for all Company-related travel expenses. In instances where these costs are treated by HMRC as taxable benefits, the Company also meets the associated tax cost to the Non-executive Directors through a PAYE settlement agreement with HMRC. NEDs who also sit on National Grid subsidiary boards may receive additional fees related to service on those boards. There are no prescribed maximum fee levels although fee increases are generally aligned to salary increases received by other Company employees and market movement for NEDs of companies of similar scale and complexity. The cost of benefits provided to the Chair is not subject to a predetermined maximum since the purchase cost will vary from year to year. Not applicable. Legacy arrangements For the avoidance of doubt, the Committee may approve payments to satisfy commitments agreed prior to the approval of this Remuneration Policy, for example, those outstanding and unvested incentive awards which have been disclosed to shareholders in previous Remuneration Reports and any commitment made to a person before that person became an Executive Director. Operation of the policy The Committee reviews annually the overall appropriateness and relevance of the Remuneration Policy and whether any changes should be put to shareholders. Decisions on the measures and targets for performance-related pay (APP and LTPP) and payouts are made taking account of overall financial and business performance. A member of the Audit & Risk Committee is required to be a member of the Committee and this ensures the Committee receives knowledgeable input on setting financial measures and assessing outturns including any adjustments and judgements considered by the Audit & Risk Committee. The Committee also works closely with the People & Governance Committee in respect of pay and conditions of newly appointed Directors to ensure their remuneration is within Policy. The Committee will also link in with the Employee Share Schemes Sub-Committee as required. Consistent with the UK Corporate Governance Code, members of the Remuneration Committee are independent Non-executive Directors who do not receive any variable remuneration and do not participate in decisions about their own remuneration. 126 National Grid plc Annual Report and Accounts 2021/22 Directors’ Remuneration Report continued Directors’ Remuneration Policy continued 26_Remco_Policy_p114_131_v87.indd 126 27/05/2022 17:29

Other features of the Remuneration Policy Policy on recruitment remuneration Salaries for new Executive Directors appointed to the Board will be set in accordance with the terms of the approved Remuneration Policy in force at the time of appointment, and in particular will take account the appointee’s skills, experience and the scope and assessment of the market rate for the role. Where appropriate, salaries may be set below market level initially, with the Committee retaining discretion to award increases in salary in excess of the wider workforce and inflation to progressively bring the salary up to the market level over time, where this is justified by individual and Company performance. Any such increases will be disclosed accordingly, along with a supporting rationale where appropriate. Benefits consistent with those offered to other Executive Directors under the approved Remuneration Policy in force at the time of appointment will be offered, taking account of local market practice. The Committee may also agree that the Company will meet certain recruitment costs, for example legal fees, certain relocation expenses or provide tax equalisation as appropriate. Pension contributions for new Executive Directors appointed to the Board will be set in accordance with the terms of the approved Remuneration Policy in force at the time of appointment. Ongoing incentive pay (APP and LTPP) for new Executive Directors will be in accordance with the approved Remuneration Policy in force at the time of appointment. This means the normal maximum APP award in any year would be 125% of salary and the normal maximum LTPP award would be 350% of salary for the CEO and 300% of salary for other Executive Directors. In exceptional recruitment circumstances, the Committee has the flexibility to award up to an additional 50% of basic salary as incentive pay and this can be applied across the APP/LTPP in any given year but for one year only. The total maximum variable pay in any year will be 525%, excluding any buyout awards. For an externally appointed Executive Director, the Company may offer additional cash or share-based payments that it considers necessary to buy out current entitlements from the former employer that will be lost on recruitment to National Grid. Any such arrangements would, so far as practicable, reflect the delivery mechanisms, time horizons and levels of conditionality of the remuneration lost. In order to facilitate buy-out arrangements, existing incentive arrangements will be used to the extent possible, although awards may also be granted outside of these shareholder-approved schemes if necessary and as permitted under the Listing Rules. For an internally appointed Executive Director, any outstanding APP awards will be determined according to the original terms but paid at the end of the year. Any outstanding LTPP awards will be paid according to the original terms. Fees for a new Chair or Non-executive Director will be set in line with the approved Policy in force at the time of appointment. Service contracts/letters of appointment In line with our Policy, all Executive Directors have service contracts which are terminable by either party with 12 months’ notice commencing immediately after announcement. Non-executive Directors are subject to letters of appointment. The Board Chair’s appointment is subject to six months’ notice by either party; for other Non-executive Directors, notice is one month. Both Executive Directors and Non-executive Directors are required to be re-elected at each AGM. Examples of circumstances which could trigger ‘good leaver’ treatment include: redundancy, retirement, illness, injury, disability and death. In these circumstances, awards will be released to the departing Executive Director or, in the case of death, to their estate. Long-term share plan awards held by ‘good leavers’ will normally vest, subject to performance measured at the normal vesting date and be reduced pro-rata for completed time of service starting on the date of grant, as per the plan rules. Such awards would vest at the same time as for other participants, apart from circumstances in which the award recipient has died, in which case the awards may vest as soon as practicable (based on a forecast of performance). At the Committee’s discretion, the Company may also agree other payments such as an agreed amount for legal fees associated with the departure of the Executive Director and outplacement support. No compensation would be paid for loss of office of Directors on a change of control of the Company. No compensation is payable to the Chair or Non-executive Directors if they are required to stand down or are not re-elected at the AGM. Copies of Directors’ service contracts and letters of appointment are available for inspection at the Company’s registered office. Policy on payment for loss of office The contracts contain provisions for payment in lieu of notice, at the sole and absolute discretion of the Company. Such contractual payments are limited to payment of salary only for the remainder of the notice period. In the UK, such payments would usually be phased on a monthly basis, over a period not greater than 12 months, and the Executive Director would be expected to mitigate any losses where employment is taken up during the notice period. In the US, for tax compliance purposes, the policy is to make any payment in lieu of notice as soon as reasonably practicable, and in any event within two and a half months of the later of 31 December and 31 March immediately following the notice date. In the event of a UK Director’s role becoming redundant, statutory compensation would apply and the relevant pension plan rules may result in the early payment of an unreduced pension. On termination of employment, no APP award would generally be payable. However, the Committee has the discretion to deem an individual to be a ‘good leaver’, in which case a pro-rata discretionary payment could be paid, based on performance (as measured at the end of the financial year) and the achievement of individual objectives during the financial year up to termination. 127 C o rp o rate G o vernance National Grid plc Annual Report and Accounts 2021/22 26_Remco_Policy_p114_131_v87.indd 127 27/05/2022 17:29

In the UK, any discretionary payment would generally be paid at the normal time. In the US the payment may be made earlier if required for tax compliance purposes, in which case the Committee would apply discretion to determine an appropriate level of financial performance. Examples of circumstances which could trigger ‘good leaver’ treatment include redundancy, retirement, illness, injury, disability and death. The Committee may apply discretion to determine if any pro-rata discretionary payment should be made sooner than it would normally be paid, for example, in the case of death. On termination of employment, outstanding awards under the share plans will be treated in accordance with the relevant plan rules approved by shareholders. Unvested share awards would normally lapse. ‘Good leaver’ provisions apply at the Committee’s discretion and in specified circumstances. External appointments Executive Directors may, with the approval of the Board, accept one external appointment as a Non-executive Director of another company and retain any fees received for the appointment. Experience as a board member of another company is considered to be valuable personal development, which in turn is of benefit to the Company. Corporate and share capital events The Group’s employee share plans (including the LTPP) contain standard provisions that allow awards (and where relevant their exercise prices) to be adjusted, or in some cases vest or be exchanged, on the occurrence of a corporate or share capital event such as a capitalisation or rights issue, sub-division, consolidation or reduction of share capital, demerger, special dividend or distribution, listing or change of control, normally at the discretion of the Committee. Total remuneration opportunity The total remuneration for each of the Executive Directors that could result from the 2022 Remuneration Policy under three different performance levels (below threshold, when only fixed pay is receivable, on target and maximum) is shown below. The maximum receivable assuming 50% share price growth (or a reduction) in LTPP awards over a three-year performance period, and the basis for this calculation, is set out in the notes below. John Pettigrew Fixed pay On target Maximum Fixed pay APP LTPP £4,416 £6,628 £1,439100% 33% 15% 52% 21% 21% 58% Andy Agg Fixed pay On target Maximum Fixed pay APP LTPP £2,618 £3,930 £855100% 33% 17% 50% 22% 23% 55% Notes: 1. Fixed pay consists of salary, pension and benefits in kind as provided under the Remuneration Policy. Salary is that to be paid in 2022/23, taking account of the increases that will be effective from 1 July 2022 as shown on page 129. Benefits in kind and pension are as shown in the Single Total Figure of Remuneration table for 2021/22 on page 114. 2. APP calculations are based on 125% of salary for the period 1 April 2022 to 31 March 2023. APP payout is 0% for threshold performance, 50% for on-target performance and the maximum of 100% is for achieving stretch. 3. LTPP calculations are based on awards with a face value of 350% of 1 July 2022 salary for John Pettigrew and 300% of 1 July 2022 salary for Andy Agg. LTPP payout is 20% for threshold performance and the maximum of 100% is for achieving stretch and straight line vesting between. Excludes changes in share price and dividend equivalents. 4. For LTPP calculations, assuming either a 50% share price growth (or reduction) over the three-year performance period, the increase (or decrease) in LTPP value and maximum total compensation for each of the Executive Directors would be (all amounts expressed as £’000): • John Pettigrew: LTI value would increase (or decrease) from £3,824 to £5,736 (or £1,912) and maximum total compensation would rise (or reduce) from £6,628 to £8,540 (or £4,716) respectively • Andy Agg: LTI value would increase (or decrease) from £2,157 to £3,236 (or £1,079) and maximum total compensation would rise (or reduce) from £3,930 to £5,008 (or £2,809) respectively. Consideration of remuneration policy elsewhere in the Company The design and implementation of executive remuneration takes into consideration the wider workforce context and remuneration strategy to ensure they are mutually reinforcing. Our executive Remuneration Policy is well aligned to policies for our non-unionised workforce, and the Committee actively considers employee feedback and views on executive pay. The Company issues an employee engagement survey each year, which includes remuneration as a topic, and regularly engages with employees on a variety of topics including remuneration to ensure employees have an opportunity to share their feedback and views. All employees are entitled to base salary, benefits, and pension contributions. The approach to assessing salaries, benefits, pensions and other elements of remuneration is consistent across the Group with an objective to ensure they remain competitive at relevant mid-market levels for all job bands/roles, including roles that are subject to union negotiation. We are pleased to report that National Grid continues to be accredited by the Living Wage Foundation as a real Living Wage employer for our UK businesses (excluding the recent acquisition of WPD). Further plans and efforts are underway to achieve equivalent accreditations for WPD and the rest of our global businesses in the US. Middle to senior leaders are eligible to participate in our long-term incentive plans either through performance share awards or restricted share awards (under the LTPP) to incentivise and reward their individual contributions toward the Company’s longer-term strategic priorities. Performance measures for the LTPP are consistent with measures set for Executive Directors to ensure strong alignment and focus on the Company’s strategic goals. Across the wider workforce, a greater emphasis and focus is placed on delivery of the Company’s annual operational and financial business plans. As such, the majority of employees are eligible to participate in the APP. Performance measures for annual incentives are cascaded through the organisation and designed to ensure they incentive elements of business performance within an individual’s control and are aligned to employee’s annual goals. All Company employees are encouraged to become shareholders through a number of all-employee share plans and a significant proportion of our employees participate annually. These plans include Sharesave and the SIP in the UK and the 401(k) and 423(b) plans in the US which are summarised on page 124. 128 National Grid plc Annual Report and Accounts 2021/22 Directors’ Remuneration Report continued Directors’ Remuneration Policy continued 26_Remco_Policy_p114_131_v87.indd 128 27/05/2022 17:29

Implementation of the Remuneration Policy for 2022/23 The Remuneration Policy to be adopted at the 2022 AGM, subject to shareholder approval, will be implemented during 2022/23 as outlined below: Salary and pensions Salary increases will normally be in line with the increase awarded to other employees in the UK and the US, subject to performance. Higher salary increases may also be awarded for a change in responsibility. Additionally, in line with the Policy on recruitment remuneration, salaries for new directors may be set below market level initially and aligned to market level over time (provided the increase is merited by the individual’s contribution and performance). As explained in the Chair’s statement, for 2022 a salary increase of 3.75% for John Pettigrew and 6.5% for Andy Agg will be awarded, effective from 1 July 2022. From 1 July 2022 From 1 July 2021 % increase John Pettigrew £1,092,500 £1,053,000 3.75% Andy Agg £719,000 £675,000 6.5% The pension contribution for new and existing Executive Directors has been set to 12% effective 1 April 2022, in line with pension contribution rates for the UK wider workforce. 2022/23 Annual Performance Plan The 2022/23 APP measures will be split across financial measures, operational measures and individual objectives, weighted 70%, 15% and 15% respectively. The increase in the financial element of the APP this year reflects a balancing of operational measures which total 15% (versus 20% in 2021/22) and individual objectives which total 15% (versus 20% in 2021/22). The maximum APP award for both the Executive Directors for 2022/23 is 125% of basic salary, in line with the Policy, subject to shareholder approval. Measure Weighting Financial measures Underlying EPS 35% Group RoE 35% Operational measures Customers: Group Customer Satisfaction Index 5% Colleagues: Group Having a Voice Index 5% Diversity, Equity, and Inclusion: % Diversity of Strategic Leadership Group (top ~110 leaders) 5% Individual objectives 15% Financial measures Underlying EPS and Group RoE have been retained as financial measures in the 2022/23 APP. In both measures for remuneration purposes, the part year contributions of UK Gas Transmission are included in the performance targets. Group RoE remains a relevant and key measure of performance as a primarily regulated asset-based company. In the short-term (APP), Group RoE targets are set to ensure strong in year returns and operational results. An ‘annual profit’ measure in the APP also remains key, given in particular the importance of regulated earnings to the business strategy. Underlying EPS is a well-understood and established measure internally and externally, and as such remains the most appropriate APP earnings measure for the business. Similar to Group RoE, annual target setting considers specific challenges and opportunities in the year ahead and is flexed accordingly whilst remaining consistent with our longer-term performance goals. Financial APP targets are considered commercially sensitive and consequently will be disclosed in the 2022/23 Directors’ Remuneration Report. Operational measures The 2022/23 APP operational measures are designed to incentivise key annual priorities aligned to the Company’s strategy as a responsible business and broader ESG goals and are weighted equally across three key measures focused on customers, colleagues and DEI. Operational measures will continue to be assessed on a four-point scale (not met, partially achieved, achieved and over-achieved) based on quantifiable targets and qualitative outcomes to reflect a balanced assessment of performance. The Group Customer Satisfaction Index is an equally weighted index of quantifiable and predominantly externally measured customer satisfaction scores/ measures across each of the Company’s business units. The inclusion of a customer measure in the APP reflects the strategic importance and focus on delivering excellent service and business outcomes for customers. The colleague ‘Having a Voice’ measure is a quantitative Group wide index from our annual Company-wide employee survey of more than 30,000 colleagues. The index measures the level of transparency and cultural openness in the organisation – a key area of focus for us. Specifically, the year ahead will maintain a strong focus on embedding the Company’s purpose, values, and culture as part of the deeper integration of WPD as well as continue to evolve the culture and ways of working across the Group. The diversity measure is a quantifiable target for the level of diversity in the strategic leadership group (SLG ~ top 110) in line with a key strategic priority to build a strong, diverse, and inclusive strategic leadership team and pipeline of talent to support the delivery of the Company’s strategy. Individual objectives The Committee has approved individual objectives for the Executive Directors in line with key strategic and operational priorities for the year ahead. John Pettigrew’s individual objectives for 2022/23 are focused on: 1) delivery of the enterprise-wide transformation; 2) execution of the Company and Board’s strategic blueprint; and 3) development and progression of a diverse, inclusive, strategic leadership group talent and capabilities. Andy Agg’s annual performance objectives are focused on: 1) management of the portfolio repositioning, credit strategy, and investor sentiment; 2) achievement of key regulatory outcomes (ED2) and performance; and 3) progression of the Finance function’s transformation and talent agenda. 129 C o rp o rate G o vernance National Grid plc Annual Report and Accounts 2021/22 26_Remco_Policy_p114_131_v87.indd 129 27/05/2022 17:29

2022 Long Term Performance Plan The 2022 LTPP performance measures and weightings for all Executive Directors comprise two equally weighted financial measures totalling 80% and two equally weighted net zero transition measures with a combined weighting of 20% as outlined in the table below. The maximum 2022 LTPP award is 350% and 300% of base salary for John Pettigrew and Andy Agg respectively, in line with the proposed Policy, subject to shareholder approval. LTPP targets and performance are measured over the entire three-year performance period, which for the 2022 LTPP is 1 April 2022 – 31 March 2025. Subject to approval by the shareholders at the 2022 AGM, the 2022 Remuneration Policy and the LTPP plan rules (approved at the July 2021 AGM that reflect updates to align to market practice and good governance, in particular for malus and clawback provisions) would apply to the 2022 LTPP awards. Measure Weighting Financial measures Cumulative three-year Underlying EPS 40% Group RoE 40% Net zero transition measures National Grid Scope 1 emissions 10% Enablement of net zero transition: Strategic initiatives (Scope 2 and 3) 10% Denotes an ‘alternative performance measure’ as described on pages 268 − 279 Financial measures LTPP financial measures are selected to reflect key drivers of the Company’s longer-term strategy and value creation for shareholders. Given the primarily regulated and long-term nature of our businesses, earnings growth and sustainable investment returns are important measures of long-term shareholder value creation. Whilst we recognise our short-term (APP) and long-term (LTPP) financial measures are similar, we believe these are the right measures to support delivery of the business strategy and the resultant creation of shareholder value. The combination of annual and long-term earnings and returns measures act together to incentivise strong operational delivery in a year, and long-term efficient asset growth and a sustainable dividend. As such, the 2022 LTPP financial measures are designed to incentivise different elements of performance over the long term as compared to the short term. Specifically in LTPP, Group RoE is averaged across the three-year performance period with targets set to ensure the company delivers sustainable performance for shareholders. Similarly, the Underlying EPS measure is a cumulative measure that sums Underlying EPS for the three years in the LTPP performance period and sets out to incentivise sustainable long-term earnings growth and value creation for shareholders. As such, LTPP Underlying EPS targets have been set in line with the Company’s five-year investor frame with target performance aligned to the top end of the range. The LTPP Underlying EPS measure will not be subject to the technical adjustments made in annual Group EPS measure. Below are the performance ranges for the financial measures in the 2022 LTPP. The targets have been set in consideration of the forthcoming RIIO-ED2 final determination, the portfolio transactions and the Company’s forward Strategic Business Plan. Financial performance measures Weighting Threshold 20% vesting Maximum 100% vesting Cumulative 3 year Underlying Group EPS 40% 199 p 217 p Group RoE 40% 9.50% 10.75% Notes: Vesting between threshold and maximum will be on a straight-line basis. The calculation for the Group RoE measure will reflect the updated methodology from 2021/22 going forward as outlined on page 277 of the Annual Report. Targets assume UK Gas Transmission minority stake is treated as a discontinued operation from start of 2023/24. Underlying EPS growth reflects the cumulative summation of the Underlying EPS results for each of the three years in the performance period; 2022/23, 2023/24 and 2024/25. Net zero transition measures The net zero transition measures set out targets and outcomes to achieve 1) reductions in the Company’s direct Scope 1 emissions and 2) enable the broader net zero energy transition to achieve reductions in Scope 2 and Scope 3 emissions through greater reliance on low carbon/renewable energy sources in line with goals set out in our RBC. The reduction of Scope 1 emissions target is a cumulative measure aligned to meet the Company’s 2030 goals and the SBTi (Science Based Target initiative) well below 2°C pathway. The Scope 1 reduction target excludes Long Island Power Authority (LIPA) generation asset emissions as management do not have direct control over decisions to run the assets. In recent years, LIPA operation has been well above predicted levels driven by regional factors including availability of local supply. Broader considerations and actions regarding the longer term for LIPA have been incorporated into the second measure as part of enabling the net zero transition. Net zero transition measures Weighting Threshold 20% vesting Maximum 100% vesting Reduction of Scope 1 emissions 10% -50 ktCO2e -117 ktCO2e Note: Target represents cumulative savings as measured against the 2022 Scope 1 emissions baseline. These targets include best current estimates of the addition of WPD and removal of the UK Gas Transmission and US Rhode Island businesses. 130 National Grid plc Annual Report and Accounts 2021/22 Directors’ Remuneration Report continued How our Remuneration Policy will be implemented in 2022/23 26_Remco_Policy_p114_131_v87.indd 130 27/05/2022 17:29

The second measure reflects National Grid’s role in enabling the net zero transition to a carbon neutral future by 2050. This measure will assess delivery against key net zero strategic priorities and quantified outcomes that underpin the Company’s strategy to enable a net zero future by 2050. There are four key areas of focus; 1) US energy-efficiency programmes and generation; 2) UK net zero transmission strategy including interconnectors and transmission investment to connect offshore wind; 3) US future of gas strategy including the transition to renewable natural gas (RNG), hydrogen, and hybrid/electrification of heat; and 4) low-carbon electricity distribution investment in line with government and regulatory plans. Assessment of this measure will be based on a four-point scale (not met, partially achieved, achieved and over-achieved) based on delivery of quantifiable and qualitative outcomes to reflect a balanced assessment of performance. Fees for NEDs Non-executive Director fees were reviewed mid-year in light of the Board Committee and membership changes to ensure alignment to the market and simplify the fee structure. The fee increases will be effective from 1 January 2022 and paid retrospectively as of 1 July 2022. Role From 1 January 2022 (£’000) From 1 July 2021 (£’000) % increase vs 2021 Chair 700.0 700.0 0.0% Senior Independent Director 30.0 23.6 27.1% Board fee 80.0 71.1 (UK based) 12.5% 84.4 (US based) -5.2% Chair Audit & Risk Committee 31.9 31.9 0.0% Chair Remuneration Committee 30.0 31.9 -6.0% Chair other Committees (Finance, Safety & Sustainability) 25.0 24.4 2.5% Audit & Risk Committee member 23.0 11.0 109.1% Remuneration Committee member 18.0 11.0 63.6% Other Committee member (Finance, Safety & Sustainability, People & Governance) 15.0 11.0 36.4% Note: For the People & Governance Committee, no fees are paid for the Committee Chair, the Senior Independent Director or the Board Chair. The Directors’ Remuneration Report has been approved by the Board and signed on its behalf by: Ian Livingston Committee Chair 18 May 2022 131 C o rp o rate G o vernance National Grid plc Annual Report and Accounts 2021/22 How our Remuneration Policy will be implemented in 2022/23

Directors’ statement and independent auditor’s reports Statement of Directors’ responsibilities 134 Independent auditor’s report 135 Consolidated financial statements under IFRS Primary statements Consolidated income statement 147 Consolidated statement of comprehensive income 149 Consolidated statement of changes in equity 150 Consolidated statement of financial position 151 Consolidated cash flow statement 152 Notes to the consolidated financial statements Note 1 – Basis of preparation and recent accounting developments 153 Note 2 – Segmental analysis 156 Note 3 – Revenue 158 Note 4 – Other operating income and costs 162 Note 5 – Exceptional items and remeasurements 164 Note 6 – Finance income and costs 167 Note 7 – Tax 168 Note 8 – Earnings per share (EPS) 172 Note 9 – Dividends 173 Note 10 – Assets held for sale and discontinued operations 173 Note 11 – Goodwill 176 Note 12 – Other intangible assets 178 Note 13 – Property, plant and equipment 180 Note 14 – Other non-current assets 183 Note 15 – Financial and other investments 183 Note 16 – Investments in joint ventures and associates 185 Note 17 – Derivative financial instruments 187 Note 18 – Inventories and current intangible assets 189 Note 19 – Trade and other receivables 190 Note 20 – Cash and cash equivalents 191 Note 21 – Borrowings 192 Note 22 – Trade and other payables 194 Note 23 – Contract liabilities 195 Note 24 – Other non-current liabilities 195 Note 25 – Pensions and other post-retirement benefits 196 Note 26 – Provisions 204 Note 27 – Share capital 206 Note 28 – Other equity reserves 207 Note 29 – Net debt 208 Note 30 – Commitments and contingencies 210 Note 31 – Related party transactions 211 Note 32 – Financial risk management 211 Note 33 – Borrowing facilities 224 Note 34 – Subsidiary undertakings, joint ventures and associates 225 Note 35 – Sensitivities 230 Note 36 – Additional disclosures in respect of guaranteed securities 232 Note 37 – Acquisitions 233 Note 38 – Post balance sheet events 234 Company financial statements under FRS 101 Basis of preparation Company accounting policies 235 Primary statements Company balance sheet 237 Company statement of changes in equity 238 Notes to the Company financial statements Note 1 – Fixed asset investments 239 Note 2 – Debtors 239 Note 3 – Creditors 240 Note 4 – Derivative financial instruments 240 Note 5 – Investments 240 Note 6 – Borrowings 241 Note 7 – Share capital 241 Note 8 – Shareholders’ equity and reserves 241 Note 9 – Parent Company guarantees 241 Note 10 – Audit fees 241 Doing Right Now Fairness and affordability We are committed to delivering energy safely, reliably and affordably to the communities we serve. As well as affordability, we will play our role in ensuring no one is left behind in the short term due to increased energy prices, or in the longer-term transition to clean energy. National Grid plc Annual Report and Accounts 2021/22132 28_Financials_Statement_Auditors_Report_132_146_v42.indd 132 27/05/2022 17:39

Financial Statements Financial S tatem ents National Grid plc Annual Report and Accounts 2021/22 133 28_Financials_Statement_Auditors_Report_132_146_v42.indd 133 27/05/2022 17:39

134 National Grid plc Annual Report and Accounts 2021/22 The Directors are responsible for preparing the Annual Report and Accounts, including the Group financial statements and the Parent Company financial statements in accordance with applicable law and regulations. Company law requires the Directors to prepare financial statements for each financial year. Under that law, the Directors are required to prepare the Group financial statements in accordance with International Accounting Standards in conformity with the requirements of the Companies Act 2006 and International Financial Reporting Standards (IFRS) as adopted by the UK. The financial statements also comply with IFRS as issued by the IASB. In addition, the Directors have elected to prepare the Parent Company financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law), including FRS 101 ‘Reduced Disclosure Framework’. Under company law, the Directors must not approve the accounts unless they are satisfied that they give a true and fair view of the state of affairs of the Group and Parent Company and of the profit or loss of the Group and Parent Company for that period. In preparing the Group financial statements, International Accounting Standard 1 requires that Directors: • properly select and apply accounting policies; • present information, including accounting policies, in a manner that provides relevant, reliable, comparable and understandable information; • provide additional disclosures when compliance with the specific requirements in IFRS are insufficient to enable users to understand the impact of particular transactions, other events and conditions on the entity’s financial position and financial performance; and • make an assessment of the Group’s ability to continue as a going concern. In preparing the Parent Company financial statements, the Directors are required to: • select suitable accounting policies and then apply them consistently; • make judgements and accounting estimates that are reasonable and prudent; • state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements; and • prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Company will continue in business. The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Group and Parent Company’s transactions and disclose with reasonable accuracy at any time the financial position of the Group and Parent Company on a consolidated and individual basis, and to enable them to ensure that the Group financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the Parent Company and its subsidiaries and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities. The Directors are responsible for the maintenance and integrity of the Company’s website. Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions. Having made the requisite enquiries, so far as the Directors in office at the date of the approval of this Report are aware, there is no relevant audit information of which the auditors are unaware and each Director has taken all reasonable steps to make themselves aware of any relevant audit information and to establish that the auditors are aware of that information. Statement of Directors’ responsibilities Each of the Directors, whose names and functions are listed on pages 88 – 89, confirms that: • to the best of their knowledge, the Group financial statements and the Parent Company financial statements, which have been prepared in accordance with IFRS as issued by the IASB and IFRS as adopted by the UK and UK GAAP FRS 101 respectively, give a true and fair view of the assets, liabilities, financial position and profit of the Company on a consolidated and individual basis; • to the best of their knowledge, the Strategic Report contained in the Annual Report and Accounts includes a fair review of the development and performance of the business and the position of the Company on a consolidated and individual basis, together with a description of the principal risks and uncertainties that it faces; and • they consider that the Annual Report and Accounts, taken as a whole, are fair, balanced and understandable and provides the information necessary for shareholders to assess the Company’s position and performance, business model and strategy. This Responsibilities Statement was approved by the Board and signed on its behalf. Directors’ Report The Directors’ Report, prepared in accordance with the requirements of the Companies Act 2006 and the UK Listing Authority’s Listing Rules, and Disclosure Rules and Transparency Rules, comprising pages 1 – 131 and 242 – 288, was approved by the Board and signed on its behalf. Strategic Report The Strategic Report, comprising pages 1 – 83, was approved by the Board and signed on its behalf. By order of the Board Justine Campbell Group General Counsel & Company Secretary 18 May 2022 Company number: 04031152 28_Financials_Statement_Auditors_Report_132_146_v42.indd 134 27/05/2022 17:39

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1.    For further details of other equity reserves, see note 28.

1. Basis of preparation and recent accounting developments

2. Segmental analysis

Sales between operating segments are priced considering the regulatory and legal requirements to which the businesses are subject. The analysis of revenue by geographical area is on the basis of destination. There are no material sales between the UK and US geographical areas.