As at 31 March 2026, 76.05% of existing homes* are reported by SHIFT as rated EPC C or above. This figure is based on our measured Statistical Data Return (SDR) and covers only our low cost rental accommodation (LCRA) stock for which we hold responsibility for meeting the Decent Homes Standard.

We lifted 883 existing homes above the EPC C threshold this year with retrofit improvements, which shows the pace at which we are reaching EPC C as a minimum.

There was however a slight dip in the proportion of EPC C rated homes this year. The introduction of SAP10 methodology in June 2025 recategorised most of our Byker Estate homes from C to D. Byker is served by a district heating system and we are reviewing options to decarbonise and improve that system. We are currently renewing the district heating system serving this estate, which will decarbonise the 1,800-home network.

*Karbon Association homes for which we have Decent Homes responsibility. No data: 0.63%.

Looking beyond this reported subset, our latest modelled data for all Karbon Group homes - including those for which we do not hold a Decent Homes duty - shows 83.41% rated EPC C or above. The two figures are complementary rather than conflicting: 76.05% is our measured, externally reported position for a specific subsection of our stock, while 83.41% reflects a modelled estimate across the full portfolio.

We plan to invest £15.2m in existing homes over the next four years, upgrading nearly 6,000 lower performing properties to EPC C and helping reduce energy costs for customers.

If so, what is it and when does the housing provider intend to be Net Zero by? 

Our Environmental Strategic Plan (2025–30) sets out how we will manage climate-related risks and opportunities across our homes, services and operations, while working towards net zero emissions by 2050.

The strategy is divided into clear categories: existing homes, new homes, customers, colleagues, offices and operations, and innovation.

Our pathway to net zero has three phases:

• 2030: Core housing and data foundations, including EPC C where feasible and prioritisation of lower-performing homes
• 2035: Fleet will be fully decarbonised
• 2050: Full net zero delivery through sustained retrofit and low-carbon technologies

SHIFT provides independent benchmarking across homes, operations and supply chain.

To ensure decarbonisation is grounded in financial reality and asset strategy, our goals are embedded in our 30-year Business Plan. This includes:

• a programme to achieve EPC C by 2030 – estimated £15.2m investment (Karbon Association only)
• investment for future Minimum Energy Efficiency Standards (MEES) by 2039 - £137.5m
• stress testing the cost of net zero by 2050 - £520.8m.

This modelling makes the scale of investment clear and shows where external funding will be needed, with significant net costs identified across EPC, MEES and full net zero delivery.

Assumptions are updated annually to reflect delivery, cost forecasts and changes in policy or funding, so plans remain current and realistic rather than fixed.

Delivery is supported by a data-led asset management approach. With an 85% stock condition survey rate, we use tools such as Portfolio and SHAPE to combine property condition, EPC and investment data. This helps us test options, prioritise investment and target the homes where intervention will have the greatest impact.

What retrofit activities has the housing provider undertaken in the last 12 months in relation to its housing stock?

In 2025/26, we delivered measurable progress against our net zero strategy, focused on improving the energy performance of existing homes and preparing for long-term delivery.

We completed 1,975 energy efficiency upgrades across our housing stock and replaced or upgraded 1,456 heating systems.

Investment is shaped by the funding available to the sector. We secured £1.8m from DESNZ through the Warm Homes: Social Housing Fund for delivery through to 2028, initially targeting around 100 homes in Stanley, including solar PV across 39 properties. We have recently successfully won a bid for a further £ 3,09m (£3,085,826) funding, which will support similar measures for around 478 additional homes in the coming year.

Our stock condition survey programme has reached an 85% access rate, giving us robust and accurate data to assess the environmental performance of our homes.

As well as protecting us from adverse Consumer Regulation judgements – many lower ratings correlate with low stock condition surveys - our superior stock condition data supports a shift from modelled assumptions to investment decisions based on real-world conditions, improving the accuracy of our retrofit programme and our long-term financial forecasting.

The scale of the challenge is significant. Our current gross development cost per home is £204,000, while the investment required to deliver net zero is estimated at around £37,590 per property over the next 30 years. Comparing these costs shows the scale of net zero investment alongside our future development ambitions.

Net zero interventions in people’s homes cannot be treated as purely technical measures. They require us to be able to access our homes, understand our customers’ needs and concerns, and actively support them. The latest independent SHIFT assessment shows that 100% of residents have access to energy efficiency information via our website as well as opportunities to get involved in a number of ongoing active engagement activities, reflecting the breadth of advice, guidance and ongoing interaction across our homes. This is fundamental to successful outcomes: without it, programmes risk refusal, lack of access and reduced impact.

Maintaining this level of engagement helps make the transition deliverable, ensuring large-scale investment translates into practical progress towards net zero.

Total emissions per home

If unable to report emissions data, please state when the housing provider is expected to be able to do so.

68,170.61 tCO2e equates to 2.39 tCO2e per home managed.

The significant reduction in Scope 3 emissions reflects both improvements in stock performance and a step change in data quality. In 2024/25, housing stock emissions were derived using SHIFT estimates where asset-level emissions data was unavailable. In 2025/26, emissions were calculated using data from our own asset management systems, providing a more accurate picture of housing stock emissions. This demonstrates the increasing maturity of our asset data and confirms that actual emissions from our homes are lower than previous modelled estimates.

How is the housing provider mitigating these risks?

Our Environmental Strategic Plan sets out that new homes should be built in areas with low flood and overheating risk, or include appropriate mitigation where this is not possible.

Flood risk is assessed at property level using Environment Agency data within our Portfolio asset system. This helps us to:

• identify higher risk homes
• inform option appraisal and investment planning through SHAPE, alongside financial and social performance
• prioritise intervention through planned investment programmes.

The SHIFT assessment indicates that 97.40% of homes are at low flood risk, providing a clear benchmarked baseline across our stock.

How is the housing provider mitigating these risks?

We are developing a water management action plan for our offices. For our homes, water efficiency is assessed through SHIFT modelling and asset data. SHIFT estimates current performance at 129.49 litres per person per day, indicating a relatively efficient baseline across our homes.

We ensure mitigation of risks through specification and investment decisions, with water efficiency built into:

• retrofit and planned works, informed by asset data
• new build and improvement standards, including efficient fittings
• longer-term asset planning and portfolio modelling.

How is the housing provider mitigating these risks?

We assess overheating risk using asset data and climate modelling. SHIFT indicates that 97.96% of homes are at low overheating risk, with no homes currently identified as high risk, placing our stock in a strong position against sector benchmarks. To date this hasn’t been a priority due to the low numbers but we are looking at this over the next few years.

The assessment combines SAP data, property characteristics and climate modelling using tools such as Cotality, a property data and analytics platform used to support asset planning and investment decisions. This provides a consistent, property-level view of overheating risk across our homes and helps us monitor how risk may change over time. 

We mitigate overheating risk through investment planning and asset management. Overheating considerations are built into major investment, retrofit and development decisions, helping ensure that factors such as insulation, ventilation and overall building performance are considered together. We also review customer feedback, complaints and data on customer vulnerabilities. This supports a balanced approach to improving energy efficiency while maintaining comfortable and resilient homes. 

The insights generated through this analysis are integrated into our wider asset management approach, helping us identify emerging risks, target further investigation where needed and ensure climate resilience is reflected in long-term investment and portfolio planning.

If yes, please describe with reference to targets in this area.

If no, is the housing provider planning on producing one in the next 12 months?

Our approach is set out in our Environmental Strategic Plan and supported by GIS mapping, SHIFT reporting and biodiversity net gain (BNG) requirements.

We start with a clear understanding of the land we manage. We map all our green spaces using GIS and categorise them by habitat type, including grassland, woodland and shrubland. SHIFT then converts those land types into biomass density, measured as tonnes of habitat biomass per hectare. This provides a consistent measure of ecological quality across our stock. We currently have:

• 4.90 tonnes of biomass per hectare, equivalent to approximately 3,730 tonnes of above-ground biomass across our land.

We have begun to measure habitat units per hectare of land owned which is currently 0.53, equating to 409.75 total habitat units across Karbon stock. SHIFT indicates that there should be 1.02 habitat units per hectare of landlord land by 2043. This gives us a clear starting point. We will seek to improve this by enhancing the quality and density of existing habitats, alongside biodiversity gains through development and land-led activity. 8.2% of homes built in the reporting period received ecological enhancements to meet BNG requirements. We have set long-term targets to increase biodiversity value to:

• 5.00 tonnes per hectare by 2030
• 6.87 tonnes per hectare by 2035
• 11.90 tonnes per hectare by 2043.

On existing green spaces, we promote biodiversity through:

• reduced mowing regimes allowing wildflowers and grasses to establish within amenity grassland, targeted planting which improves species diversity, and ongoing maintenance to support habitat maturity and resilience
• data-led management of trees and green assets: GIS mapping is supported by Ezytreev tree management software, helping us assess the condition of trees, increase canopy cover and target interventions where ecological value is lowest.

If so, how does the housing provider target and measure performance? 

We identify and manage pollutant risks through established health and safety systems, primarily COSHH assessments and task-based risk assessments.

COSHH assessments identify hazardous substances used in our operations and the potential risks they pose to people and the environment. They define control measures, safe handling arrangements, emergency actions and protections to prevent contamination of land and drainage systems.

Task-based risk assessments consider how different activities may introduce pollutant risks and ensure we put appropriate controls in place to minimise harm.

These controls are supported by safe storage, handling and disposal processes, contractor requirements and staff training. We monitor performance through COSHH compliance, internal audits and incident reporting, and manage any environmental incidents through established procedures.

If so, how does the housing provider target and measure performance?

SHIFT estimates that 57% of materials used in repairs and maintenance are responsibly sourced, based on supplier certifications and available data. This provides an independently assessed baseline of our current position within our Property Services.

Through our Environmental Strategic Plan, we are now extending this approach across repairs, development and our wider supply chain, establishing a minimum 60% baseline across all activities by 2030. This reflects a shift from a single service measure to a consistent, organisation-wide KPI, improving comparability and control.

SHIFT also highlights that, in some areas, supplier data is incomplete and, therefore, industry-standard assumptions are applied. A key next step for us is to strengthen the quality and coverage of this data, aligned with our ESG approach to developing more robust, auditable supply chain metrics.

If so, how does the housing provider target and measure performance?

In 2025–26, 84.28% of waste was diverted from landfill. This reflects a significantly wider reporting scope than in previous years, now capturing waste from repairs, planned investment, refurbishment, development and wider contractor activity, providing a more representative baseline.

This builds on our established operational practices, including segregation into ten waste streams, supporting high levels of recycling and reuse.

Through our Environmental Strategic Plan, we are moving towards a target-led model, including 97% diversion of refurbishment waste by 2030, aligned to circular economy principles.

This approach is also reflected at estate level through initiatives such as improved waste and recycling provision in Byker (see case study below).

If so, how does the housing provider target and measure performance? 

We set targets for water usage both in our offices and our homes. SHIFT’s water efficiency calculator analyses the water efficiency measures we have installed in our homes to estimate water consumption across our stock as 129.49 litres per person per day. Our target is 125 litres per person by 2030. Water usage in our main offices was estimated to be 1.490 m³ total usage, which is 3.77m³ per employee. Our target is 3m³ per employee by 2030.

What measures are in place to monitor the sustainability of the housing provider’s supply chain when procuring goods and services?

We have embedded sustainability within procurement through a coordinated approach that brings together responsible sourcing, waste management and supply chain engagement.

Through our Environmental Strategic Plan, these areas are now aligned within a single framework of targets, KPIs and governance, ensuring consistency across repairs, development and our supply chain activity. This includes:

• supplier requirements (e.g. FSC/PEFC, ISO14001, BES6001)
• increasing use of responsibly sourced materials (see C11)
• waste reduction and recycling expectations (see C12–C13)
• embedding whole-life and circular economy considerations in decision-making.

SHIFT highlights that, across the sector, supply chain reporting can rely on assumptions where data is limited. Our focus is therefore on strengthening supplier engagement, data capture and KPI alignment, ensuring sustainability is not only specified in procurement, but consistently measured and delivered across the full lifecycle of works.

- Rent compared to average private rental sector (PRS) rent across the relevant Local Authority

- Rent compared to the relevant Local Housing Allowance (LHA)

• General needs (social rent)
• Intermediate rent
• Affordable rent
• Supported housing (excluding housing for older people)
• Housing for older people
• Low-cost home ownership
• Care homes
• Private rented sector
• Private market sale
• Other

• General needs (social rent)
• Intermediate rent
• Affordable rent
• Supported housing (excluding housing for older people)
• Housing for older people
• Low-cost home ownership
• Care homes
• Private rented sector
• Private market sale
• Other

GRAPHIC: Units completed by local authority 2025/26

During the year, we completed 478 new homes across our areas of operation, with 59% delivered in Yorkshire and 41% in the North East. The average development cost of our new homes is £204k per home, reflecting ongoing market pressures and higher investment standards. In total, we invested £107.9m in the delivery of new homes during the year, supported by £25.5m of Homes England grant funding.

We are addressing the impact of high energy costs by improving the energy efficiency of our homes and providing targeted financial support to customers. 83.4% of Karbon Group homes now achieve EPC C or above, while we build new homes to higher standards, with an average SAP rating of 90 and 81% achieving EPC A or a high B, helping to reduce energy use and ongoing heating costs.

Where additional support is needed, our financial wellbeing service provides practical assistance to customers. During the year, we distributed £31,286 in energy crisis vouchers to help households manage immediate cost pressures.

% of homes for which all required gas safety checks have been carried out.

% of homes that meet national fire safety regulations (varies by nation – see guidance).

% of homes for which all required electrical safety checks have been carried out.

% of homes for which all required asbestos management surveys or re-inspections have been carried out.

% of homes for which all required legionella risk assessments have been carried out.

% of homes for which all required communal passenger lift safety checks have been carried out.

TSM Management Information Measures reported to the Regulator of Social Housing.

Our Building and Customer Safety Programme is strengthening our safety management system, including the production of safety cases for higher risk buildings. This includes three buildings registered with the Building Safety Regulator spanning across 18 high-rise blocks at Byker, where we will be delivering a £13.7m programme of fire safety improvements.

Resident assurance remains central to our approach. We provide clear routes for reporting concerns and engage residents through panels, surveys and direct feedback. We monitor performance through measures such as residents' understanding of fire safety procedures, perceptions of safety and confidence that concerns will be resolved effectively.

Of those which fail, what is the housing provider doing to address these failings?

100% of our homes met the Decent Homes Standard as at 31 March 2026, with no homes reported as failing the standard at year end. The standard requires homes to be free of Category 1 hazards, in a reasonable state of repair, have reasonably modern facilities and services, and provide a reasonable degree of thermal comfort.

Our assurance is based on physical inspection supported by modelling. We hold current stock condition survey data for 85% of homes, having sought access to 100%. We undertake surveys on a rolling five-year cycle through a mix of in-house and external surveyors, supported by independent quality checks. Where access is not possible, condition is modelled using comparable stock to ensure every property is reflected in investment planning.

The Regulator of Social Housing's 2024/25 stock profile shows that only 57.4% of large providers had physically inspected between 81% and 100% of their low-cost rental homes over five years, placing our coverage among the stronger performers in the sector.  We maintain 100% of homes meeting the DHS through a combination of responsive repairs and planned investment. Any Category 1 HHSRS hazard is addressed immediately through responsive repairs, contributing to 99.4% of emergency repairs being completed on time during the year, compared with a sector median of 96%.

Condition-related issues are managed through planned preventative maintenance, with investment prioritised according to age, condition and repair history, and delivered through our three-, five- and 30-year planned investment programmes. This is supported by regular asset management reporting and annual investment of around £15.5m in property compliance.

Looking ahead, we are aligning our investment and retrofit programmes to the Government's proposed reforms to the Decent Homes Standard, including new requirements relating to damp and mould and future Minimum Energy Efficiency Standards.

How do you reduce the likelihood of damp and mould hazards occurring?

Damp and mould is a health and safety issue. Our approach is designed to find problems early, respond quickly and reduce the chance of them happening again. Over the last two years, we have strengthened our approach to damp and mould, moving from a mainly reactive service to a clearer, risk-led system.

GRAPHIC: What have we done to improve our approach to damp and mould?

Prevention starts with knowing our homes well. Our stock condition survey programme, now covering 85% of our homes, helps us spot risks earlier and target work where it is most needed. Damp and mould is reported or identified through a range of routes, including customer contact, colleague visits, stock condition surveys and void inspections. This helps make sure issues are not missed.

We do not rely only on customers telling us there is a problem. Through our Something’s Not Right process, customer-facing colleagues can flag concerns during everyday visits and conversations, including where a customer may not have reported the issue themselves.

Once a case is identified, it follows a clear process:

• logged with photographic evidence and Housing Health and Safety Rating System (HHSRS) categorisation
• triaged based on severity and vulnerability
• allocated to appropriate teams with defined response times
• tracked through to completion with follow-up after three months.

Our triage approach means that we escalate the most serious cases immediately, while lower-risk cases are prioritised based on severity and customer vulnerability.

This is supported by systems developed through our working group on damp and mould, giving colleagues real-time oversight of cases and helping us meet Awaab’s Law requirements.

Reducing the likelihood of it occurring in the first place

GRAPHIC: What have we done to improve our approach to damp and mould?

We have also developed a predictive damp and mould risk model. It uses historic cases, property information, environmental factors and customer data to help identify homes most likely to experience issues before they arise. The model:

• draws on circa 7,000 historic cases alongside non-case data
• incorporates property, environmental and household characteristics
• generates a risk probability for every home, grouped into five risk bands.

We will use this insight to:

• prioritise inspection in high-risk homes
• align investment to risk, not programme cycles
• target effort where it will have the greatest impact.

How has the housing provider acted on these results?

Results of Low Cost Rental Accommodation Tenant Satisfaction Measure Survey reported to the Regulator of Social Housing.

Despite largely upper quartile results, we identified lower performance in our complaints indicator so we created a dedicated complaints team in May 2025. As a result, we have seen a clear improvement this year with satisfaction increasing from 43.2% to 54.6%. The team works with operational colleagues to record, oversee and follow up complaint actions, including a new role focused on learning from complaints. Timeliness has improved significantly, and the team is now helping us respond more consistently, triage complaints earlier and learn more from the issues customers raise.

There are two main routes for customers to hold us to account – through our Resident Engagement Framework which we address further in C31, and through our Complaints process.

Our Complaints, Compliments and Suggestions Policy defines a complaint as ‘any expression of dissatisfaction, however made’. Customers do not need to use the word ‘complaint’ for us to recognise and act on their concern.

An issue may start as a service request. If the customer is unhappy with the outcome or the way it has been handled, they can raise a formal complaint, ensuring the issue is recorded, reviewed and followed through.

Once a complaint is raised, it is allocated to named colleagues and investigated through clear stages, with senior involvement increasing where a complaint is escalated.

• At Stage 1, complaints are investigated by a named complaint handler in partnership with a named operational lead at Team Leader, Manager or Head of Service level.
• At Stage 2, complaints are reviewed by a more senior complaint handler with a named operational lead at a more senior level.

If customers remain dissatisfied, they can request escalation to Stage 2. After that, they have the right to refer their complaint to the Housing Ombudsman for independent review.

All complaints are formally recorded, including the original issue, investigation, decisions and actions. This creates a clear audit trail and makes sure concerns are visible, owned and followed through.

Complaints performance and learning are reported to the Karbon Residents Committee, the Group Customer Committee and the Group Board, giving residents and board members a clear view of how we are performing and where we need to improve. We also publish an annual complaints report and self-assessment for customers and provide them with our learnings from complaints.

Overall, customer concerns are:

• recognised as a complaint where appropriate
• owned by named individuals
• escalated through management where required
• subject to resident scrutiny and board oversight.

One named board member and one executive director are responsible for complaints and oversee our complaints performance. This makes sure management stays connected to customer challenge and is accountable for putting things right.

Report ONE OR BOTH of the following quantitative metrics:

- % of Stage 1 and Stage 2 complaints responded to within target timeframes (varies by nation).

- Average time in working days to respond to Stage 1 and Stage 2 complaints.

How have reported complaints resulted in change of practice within the housing provider?

The arrangements set out in C23 help us capture customer dissatisfaction consistently and use it to improve services.

Complaint volumes increased in 2024/25 following changes to the Housing Ombudsman Complaint Handling Code. In 2025/26, volumes reduced to 2,523, a 3.92% reduction on the previous year, showing early signs of stabilisation alongside improvements in service delivery.

Performance has remained strong:

• 99.2% of Stage 1 complaints responded to within timescale (TSM CHO2)
• 97.0% of Stage 2 complaints responded to within timescale (TSM CHO2)

Most complaints are resolved without escalation:

• 84.3% resolved at Stage 1
• 17.7% escalate to Stage 2, below sector benchmarks

Customer satisfaction with complaint handling also improved, rising from 43.2% to 54.6%.

The type of complaints we receive is also changing. Complaints about repair timescales have reduced, reflecting the improvements we have made in that service area.

How complaints have resulted in change of practice

We use complaints as a direct source of insight into where services are not meeting expectations and where we need to make practical changes.

Through regular reporting to senior management, resident committees and governance, and detailed review of individual complaints and emerging themes, we capture learning. This has led to changes in repairs and communication around them including:

• follow-on repair appointments are now booked before leaving the property, so customers know immediately when work will be completed
• customers have greater control over appointment scheduling, including booking and rescheduling
• communication has been strengthened, including proactive follow-up after certain repairs such as damp and mould
• van stock processes have been improved to increase first-time fix rates and reduce delays.

These changes are already contributing to fewer complaints, better satisfaction with complaint handling and fewer delays in key services. As a result, we’ve seen:

• a reduction in overall complaint volumes
• improved satisfaction with complaint handling
• fewer delays and repeat visits in key services.

Our complaints process is supported by clear roles and responsibilities, so complaints are investigated, responded to and tracked through to completion.

Please include support across any of the following areas, as well as any other relevant services:

- Employment & training

- Wellbeing & mental health

- Vulnerable tenants

Over the last year, we have supported customers in a range of ways, from help with finances and energy costs to employment, training, wellbeing and specialist housing support. These services work best when they are connected, helping us spot customers’ needs early and offer the right support at the right time.

We set up the Karbon Foundation in April 2026, which, going forward, will bring together our employment, skills and financial wellbeing support, our community investment programme, our place work and our befriending service into one offer for customers and anyone living in the communities we work in.

Employment and skills

Through our employability and support service, we supported 499 tenants to build skills, improve confidence and move closer to work, training or greater independence.

This support includes:

• 162 tenants supported into training and qualifications
• 126 tenants supported into employment outcomes
• 108 tenants supported to improve digital skills.

These programmes provide practical routes into work, including our accredited training, our digital skills support and our tailored employment advice.

A recent example demonstrates how our services work together:

Lee’s path to employment with Karbon | Karbon Homes

In this example, a tenant first supported through our financial inclusion service was referred into our employability service. With tailored support, they went on to secure employment with Karbon.

This shows how our services can work together around a customer’s wider circumstances, supporting longer-term change rather than providing one-off help.

Customer finances and support for vulnerable tenants

GRAPH: Employee Net Promoter Score (eNPS) trend

Our financial wellbeing team helps customers maximise income, resolve benefit issues and manage financial hardship.

Over the last year, this support generated £8.3m total income gains for customers delivered through a combination of interventions including:

• £838,600 in savings generated through the Northumbrian Water Support Plus Scheme, reducing household bills
• 211 tenants supported through the Social Security Appeals process with a 78.2% success rate in appeals, helping resolve complex benefit issues and improve financial stability.

We also provided direct crisis support where customers needed urgent help:

• 1,357 food crisis vouchers issued
• £63,105 in food support provided
• £31,286 in energy crisis vouchers distributed
• 71 tenants supported through targeted support funds

This support helps customers deal with immediate pressures while also building longer-term financial stability.

Our current rent arrears stand at 2.3%, down from 2.65% last year and 3.42% the year before. This is the lowest level in five years and reflects the value of early, practical support. Lower arrears can also reduce wider pressures for customers, including issues linked to wellbeing, property condition and tenancy sustainability.

- Physical changes to shared spaces or public realm

- Events, activities, and signposting

Alongside supporting individual customers, we focus on the places people live in. Over the last year, we have worked with residents, partners and local organisations to bring space back into use, support local activity and rebuild confidence in neighbourhoods. By combining physical improvements with community programmes and local partnerships, we are helping create places that feel active, connected and sustainable over time.

Our approach brings together place-making and community investment, allowing us to align funding, partners and local priorities to build momentum and deliver visible change. This is particularly evident in places such as Byker and Stanley, where our long-term, coordinated investment and activity is helping strengthen both community infrastructure and local identity.

In Byker, our focus has been on creating lasting community assets. Working with partners, we secured over £107,000 from Historic England and more than £240,000 through the Heritage Lottery Fund to repurpose underused spaces into community and enterprise hubs. These spaces, previously vacant, are being transformed into flexible environments for skills development, local businesses and community activity - assets that local people can use and shape over time.

In Stanley, our work has centred on bringing visible life back to the high street. A programme of markets and events attracted over 1,900 visitors, with local traders, street food vendors and families returning to use the space in ways that had previously declined. Public realm improvements - including five large-scale shutter art installations - have transformed vacant units and contributed to a renewed sense of activity and confidence on the high street.

This has been complemented by cultural programmes that bring communities together across generations. Through initiatives such as Lumiere 2025 and Song for Stanley, residents of different ages have taken part in workshops and creative activity, working together to produce shared outputs that reflect local identity. These activities promote intergenerational engagement, strengthening connections between older and younger residents.

This work is reinforced through strong partnership structures. Two dedicated forums – the Stanley Stakeholder Reference Group and the Front Street Partnership - bring together over 140 stakeholders from more than 50 organisations, helping to align our activity and take a more coordinated approach to regeneration. Through this, we have supported the unlocking of over £300,000 of private investment into the town centre, demonstrating how partnership working can amplify impact beyond direct investment alone.

Alongside physical improvements, we have continued to invest directly in people and community organisations. Over the year, we provided £277,838 in funding across 187 grants, alongside a £16,000 Winter Fund supporting local projects delivering essential food and household support. This investment helps communities respond to immediate challenges while strengthening the organisations that underpin longer-term resilience.

Accessible local support has also been expanded through partnerships with organisations such as The Bread and Butter Thing, which provides affordable weekly groceries while acting as a trusted local community hub. Across our communities, these hubs have delivered over 450,000 meals, supporting more than 1,500 members. Beyond food provision, they have become informal entry points into wider support, helping residents connect with services and with each other in a familiar, accessible setting.

We have also continued to address social isolation, particularly among older residents. Through our Staying Connected service, previously known as Silver Talk and Silver Friends, we support over 400 residents thanks to a network of more than 100 volunteers, offering regular contact and opportunities for participation in community life.

Overall, the cash inflows (grants and social value) and outflows (Community Investment and Place funding) bring together a coordinated approach that is generating over £6.5m of combined value. Importantly, it complements our customer support services, ensuring that both individual resilience and community strength are developed together, with change that is visible, sustained and locally rooted.

What measures are in place to monitor the delivery of this social value?

Social value is one of the ways we use our spending power to create wider benefits for the places we work in. We build social value into procurement from the start with a 10% weighting applied to social value in all tenders over £100k. Over the last year, the value delivered through our contracts and partnerships has grown significantly:

• £5.7m delivered in 2025/26, up from £2.4m - a 140% year-on-year increase
• £5.4m delivered through the National Themes, Outcomes and Measures (TOMs) social value framework, up 128%. Reinforcing TOMs as the primary mechanism which quantifies and channels social value gives us a clear and consistent way to turn supplier commitments into practical outcomes.

Our progress in numbers

The timeline below shows how the changes we’ve made have led to social value growth:

The story behind the success: Creating value

The increase in the level of social value we generate is not just achieved through more procurement activity. It reflects a more hands-on approach to helping suppliers understand what local communities need and how their commitments can make a real difference.

We work closely with regional partners to ensure social value activity supports local priorities. Partnerships with the North East Mayoral Strategic Authority and the North East Institute of Technology help link supplier contributions to skills, employment and economic priorities across the region.

Support is then channelled through schools, colleges and our employment support service, helping turn commitments into opportunities that local people can access.

Across employability partnerships alone, suppliers delivered 2,674 hours of support, including mentoring, training and work-readiness activity.

The table shows strong growth across delivery measures, notably:

• volunteering hours (+228%)
• support into work hours (+398%)
• apprenticeship weeks (+151%).

This growth has been driven by listening to partners, understanding where support is needed and matching supplier commitments to practical opportunities.

Our focus is on making sure social value does not stop at a promise in a contract. We work with suppliers and partners to turn those promises into measurable delivery.

For example, the 228% increase in volunteering hours was shaped by our work with food partnerships, where volunteer capacity was a clear and immediate need.

Wansbeck: At Wansbeck Valley Food Bank, partners needed drivers over the Christmas period. Suppliers responded directly, giving volunteer time where it was needed most.

Working closely with partners also helps identify smaller needs that can make a big difference. In one example, social value funding helped replace a broken label printer, removing a practical barrier for a local charity.

Across the programme, suppliers delivered 466 volunteer hours across 27 projects, alongside £65,000 of in-kind contributions supporting 45 projects.

Building Self Belief: Our work with Building Self Belief shows how social value can help community organisations build capacity and improve the spaces they use.

Building Self Belief is a longstanding community partner delivering youth and community activity. When the organisation had the opportunity to take on a 25-year lease for a local building, it needed practical support to make the space usable.

We helped bring partners and suppliers together to support the project:

• Mitie provided materials and trade staff to decorate the building
• CEF designed the lighting and donated materials
• £4k from the social value fund was used to unlock £10k from Durham County Council for new windows

Final insights

The results show that social value as a percentage of procured expenditure is increasing. This tells us that impact comes from how commitments are designed, supported and followed through, not just from how much we procure.

Overall, our approach works best when social value is rooted in local need, shaped by strong partnerships and actively managed through to delivery.

In September 2025, Karbon was awarded the following regulatory status:

Governance G1 / Viability V1 / Consumer C2

Are ESG risks incorporated in the housing provider’s risk register?

Yes. ESG risks are incorporated within Karbon's strategic risk framework and principal risk register. Rather than being managed as a single standalone risk, ESG considerations are embedded across a number of our principal risks, particularly investment in existing homes, customer service and satisfaction, governance and compliance, and people.

The Board sets the organisation's risk appetite annually and receives quarterly reporting on principal risks, performance and assurance. Committees are responsible for monitoring risks within their delegated authority, while the Group Audit and Risk Committee oversees the overall effectiveness of risk management and internal control arrangements.

Environmental risks are primarily overseen through the Group Development Committee, including net zero delivery, environmental sustainability and asset compliance. Social risks, including customer service, customer outcomes and consumer regulation, are scrutinised through the Group Customer Committee. Governance, compliance, health and safety, data quality and workforce capability are overseen through the relevant Board committees. 

Strategic risks are reviewed quarterly by the Group Executive Team and supported by regular horizon scanning to identify emerging legislative, regulatory and sector risks. The Board receives assurance through performance reporting, compliance monitoring, internal audit and independent scrutiny, supported by the Group's Three Lines assurance framework. 

ESG risks are also integrated into long-term business planning. Key areas such as decarbonisation, asset investment, consumer regulation and workforce capability are reflected within our 30-year business plan and are regularly stress-tested to ensure delivery remains affordable, sustainable and aligned to our strategic objectives.

There have been no adverse regulatory findings resulting in enforcement or equivalent action during the last 12 months.

We use customer insight, resident involvement and board review to make sure a broad range of voices inform governance.

We know that governance cannot rely only on the people who choose to take part in formal engagement. Some customers may be less visible or may not feel able to share their views directly. Our approach brings together active customer voice with wider insight so decisions are informed by a fuller picture of the communities we serve.

Getting to Know You is central to this, providing a continuously updated baseline of customer data (and need) through digital contact and customer interactions. Using data alongside customer voice gives us a more current and representative understanding of customers’ needs, rather than relying on one-off surveys or self-selected feedback.

We also provide a range of ways for residents to influence services and decision-making:

Scrutiny and accountability

• Scrutiny Bank – undertakes service reviews and reports findings into governance
• Complaints Review Panel – reviews complaint handling and strengthens customer challenge
• Customer Readers Panel – scrutinises how policies and services are communicated

Service design and decision-making

• Procurement Panel – involved in contractor selection, evaluation and monitoring
• Building Safety Panel – shapes safety communication and engagement
• Customer Environment Group – influences environmental strategy and delivery
• Grants Panel – shapes community investment decisions

Community voice and lived experience

• Sheltered Housing Residents Forums – represent older residents and supported housing
• Leaseholder Group – reflects leaseholder perspectives
• Young person engagement – captures the voice of younger customers
• Area-based and thematic groups – reflect place-specific and emerging issues

These groups focus on practical issues and service outcomes, helping make sure customer input is grounded in lived experience.

Insight from this work is brought together through the Karbon Residents Committee, creating a clear route into formal governance and board-level discussion. The Chair and Vice Chair of the Karbon Residents Committee also sit on our Group Customer Committee alongside board members.

GRAPHIC: Formal governance and customer voice

We also regularly review the skills, experience and diversity of the board and its committees, using this to inform future recruitment and succession planning.

Our framework helps governance reflect both the voices we hear directly and the needs that may otherwise be less visible.

We build equality, diversity and inclusion into board and senior recruitment through succession planning, targeted recruitment and pipeline development.

Our Board Succession Policy requires an annual review of our board and committee composition, looking at skills, experience and diversity. Any gaps we identify through this review help shape future recruitment.

Our Group People Committee oversees appointments, helping ensure a transparent process that considers both individual capability and overall board balance.

We widen the candidate pool by:

• partnering with the Housing Diversity Network 

• open recruitment combined with targeted outreach 

• encouragement of applications from individuals with lived experience of social housing. 

We also support a Board Trainee Programme, providing a structured two-year route into governance. This helps build confidence, experience and a more diverse pipeline of future board and committee members.

This makes our approach deliberate and forward-looking, strengthening representation over time rather than relying on individual appointments alone.

Board turnover over the last two years was 41.67%.

Five of the 12 Board members changed during this period: one resignation and four members reaching the end of their tenure.

Three members of the Audit Committee have recent and relevant financial experience.

91.7% of board members are non-executive directors (11 of 12 board members).

The current external audit firm partner has been responsible for auditing the accounts for eight years. The contract was retendered and reappointed in 2025/26.

The last independently run board effectiveness review took place in December 2023. The next review is planned for Q3 2026/27.

Board members declare interests when they are appointed, annually and within 28 days of any new conflict arising. These interests are recorded in a central, publicly available register overseen by the Company Secretary. At meetings, conflicts are declared and managed by the Chair. Where needed, members withdraw from discussions or decisions. If a conflict cannot be managed appropriately, the member may be required to step down.

Yes.

The following figures are calculated using a standardised methodology set by the Department of Business, Energy and Industrial Strategy (BEIS) in 2019 known as Option A. This method represents the most statistically accurate way of identifying UK employee remuneration using three percentile points for added clarity.

We promote equality, diversity and inclusion (EDI) across our workforce through a combination of clear policy, embedded processes and active colleague-led initiatives, supported by external validation. 

Our approach is underpinned by the Inclusion and Belonging Policy, which sets out our commitment to eliminate discrimination, promote equality of opportunity and create an inclusive working environment for colleagues at all levels.  

This is reinforced by the Dignity and Respect at Work Policy, which establishes clear expectations of behaviour and provides a framework for preventing and addressing bullying, discrimination and harassment. It applies to all colleagues and ensures concerns can be raised and addressed in a fair and consistent way.  

All policies, strategies and major decisions are subject to an Equality Impact Assessment (EQIA), which assesses impacts on colleagues with protected characteristics and wider vulnerabilities before implementation. This ensures barriers are identified early, mitigated and monitored, embedding EDI into decision-making rather than applying it retrospectively.  

We also promote EDI through practical, colleague-led initiatives. Our Inclusion Hubs provide structured spaces for colleagues to share experiences, influence policy and drive change. For example: 

• The Pride Hub supports LGBTQ+ colleagues and allies, raising awareness and building understanding 

• The DANI Hub (Disability and Neurodiversity Inclusion) brings together colleagues to identify and remove barriers in the workplace  

These hubs are colleague-led and feed directly into organisational priorities and action planning. 

We measure and improve our approach through external benchmarking and feedback. We work with the National Centre for Diversity (NCFD), using colleague surveys to understand lived experience and inform our action plan.

This has contributed to our achievement of Silver Investors in Diversity accreditation, recognising progress in embedding fair and inclusive practices across the organisation.  

Our approach has also been externally recognised through excellence awards in diversity and inclusion, demonstrating the impact of our policies, colleague engagement and our continuous improvement approach. 

Together, this ensures that EDI is defined in policy, embedded through process, shaped by colleagues and tested through independent assessment, creating a working environment where colleagues feel supported, included and able to thrive. 

We take a structured and practical approach to supporting our colleagues’ health, combining accessible healthcare, flexible working conditions and a culture that encourages openness and early support.

Health and wellbeing activity

Our approach is structured around five priorities: Be healthy, Be safe, Be resilient, Be connected and Be savvy, covering physical health, mental health, safety, social connection and financial wellbeing.

Colleagues access support through a central Wellbeing Hub, providing a clear route into services such as 24/7 counselling, condition-specific guidance and direct support.

Alongside this, peer support is available through dedicated Teams channels, where colleagues can speak openly about shared experiences. These include channels focused on neurodiversity , cancer support, menopause and mental health.

They are active, colleague-led spaces rather than static resources, helping to create a culture where conversations about health are normalised and support is visible.

Our approach has been externally recognised through Better Health at Work Ambassador status, awarded through the regional Better Health at Work programme, which recognises employers who demonstrate long-term, embedded commitment to workplace health. Achieving Ambassador status reflects sustained delivery over time, leadership involvement and continuous improvement, rather than one-off initiatives.

Tangible support for physical and mental health

Colleagues have direct access to healthcare through our Health Cash Plan (BHSF). We fund the full cost of the bronze level as a core benefit, meaning colleagues can claim money back on everyday healthcare costs such as dental treatment, eye care and physiotherapy, without needing to opt in or pay additional premiums.

The plan also includes 24/7 GP access and counselling support. Where counselling is needed, colleagues are matched with a specialist and offered a structured programme of support (minimum six sessions per issue), providing continuity rather than one-off conversations.

Additional tools support day-to-day wellbeing, including the My Mind Pal app (mental health monitoring and prompts) and BHSF Connect, which brings guidance, services and support together in one place.

This is reinforced through a strong organisational culture. Mental Health Allies are trained to recognise early signs of stress and provide a safe, informal first point of contact, helping colleagues access support quickly and without stigma.

We recognise the impact of working conditions on health. Colleagues receive a £633.38 annual flexible benefits pot, which they can either take as additional pay or use to purchase benefits such as private medical insurance, health screening or additional leave. This flexibility allows individuals to tailor support to their own circumstances.

This sits alongside 26–31 days' annual leave (increasing with service) and enhanced parental support, enabling colleagues to balance work with health and life events.

Our Employee Net Promoter Score (eNPS) is generated via surveys which ask employees if they believe Karbon is ‘a great place to work’. Our rising scores show that our colleague perception of Karbon is outstanding:

HIVE - the organisation who designed the framework - produced the following guidance which indicates that our eNPS score of +42 is ‘outstanding’:

• +40 = outstanding
• +20 to +40 = very good
• -10 to +20 = average
• -10 or less = below average

Alongside strong engagement, colleague wellbeing is reflected in stable levels of attendance across the organisation. During 2025/26, average sickness absence was 10.33 days per colleague. This figure is composed of short-term absences at 6.26 days per year plus longer-term absences which add a further 4.07 days. This indicates a stable and well-supported workforce, with no evidence of systemic pressure or imbalance.

With 1,336 colleagues, we continue to invest in professional development to build capability, support progression and improve service delivery.

Professional development activity

We invest in development through formal qualifications, leadership programmes and applied workplace learning.

Qualifications and CPD

• 38 applications for qualifications in 2025/26, with 28 approved (74%)
• £63,922 invested, more than doubling investment from the previous year

This increased investment reflects a more targeted approach, aligning development to organisational priorities and skills gaps.

Leadership development and pipeline

We are actively building leadership capability through structured programmes.

Aspire to Lead

Aspire to Lead is designed to develop future leaders through a blend of exposure, mentoring and practical experience, helping colleagues build confidence and transition into leadership roles.

• 57 colleagues developed since launch (2024)
• 56% of those who complete the programme have enjoyed career progression
• Programme NPS +92, our highest performing development offer

Leadership Essentials

• 52 colleagues developed this year across four sessions
• 38 new managers enrolled
• Programme NPS +70, with participants reporting strong confidence in applying learning

Participants completing the full programme report an NPS of +100, with clear feedback that it equips them to lead effectively.

Onboarding and early development

Our onboarding approach is a key part of early development and engagement:

• Our welcome programme has an NPS of +68, with 93% of colleagues saying it was worth their time
• New starters report 100% confidence in being prepared for their role and 90% would recommend Karbon as a place to work

This translates into engagement outcomes:

• NPS +61 for colleagues with less than one year’s service

This upward movement shows that early investment in development is strengthening engagement from the outset.

Ongoing learning and development

• Colleagues completed 12,113 hours of learning (8.5 hours per person)
• 88.7% compliance across mandatory training

This is supported by our ‘3Es model’ (Experience, Exposure, Education), ensuring learning is embedded in day-to-day roles.

Impact on staff and organisation

The impact of this investment is reflected in sustained improvements in engagement and leadership capability.

Colleague engagement (Hive)

Our Employee Net Promoter Score (eNPS) has improved from -9 (2019/20) to +42 (2025/26), representing a sustained shift to high engagement and advocacy.

Hive surveys also provide real-time insight into leadership effectiveness. Scores such as ‘My Manager’ - 8.55 out of 10 - reflect consistently strong performance, with feedback used regularly to inform development priorities and leadership support.

Organisational impact

This investment is translating into:

• stronger leadership pipeline, with clear progression from Aspire to Lead
• high engagement among new starters, supporting retention and culture
• more confident, capable managers, improving decision-making and team performance
• a resilient workforce, better equipped to respond to customers’ needs.

Professional standards

Our approach aligns with the Conduct and Competency Standard, with the Conduct and Competency Policy (2025) embedding the skills, knowledge and expected behaviours across recruitment, development and performance management. The ongoing qualification programme provides a structured pathway for colleagues to achieve and maintain the professional standards expected within the social housing sector. We have identified 118 colleagues, across 74 roles, who will be required to have a qualification.

Of those 118, 25% already have a suitable qualification, 17% need a top-up to bring their qualification in line with the regulations, 5% are currently undertaking a qualification and the remainder will need to complete theirs by October 2029.