Streamlined Energy and Carbon Reporting (SECR) is a UK Government policy that requires businesses to report on their energy use, greenhouse gas (GHG) emissions, and energy efficiency measures. The SECR framework was introduced in April 2019 as a replacement for the Carbon Reduction Commitment (CRC) energy efficiency scheme, and it applies to all large companies.

In this article, I will provide a comprehensive overview of the SECR requirements, including what information businesses need to report, who is required to report, how to comply with the SECR regulations, and also its benefits.

What is SECR?

Streamlined Energy and Carbon Reporting (SCR) is a mandatory reporting framework that requires businesses to report their energy use, GHG emissions, and energy efficiency measures in their annual reports. The SECR framework applies to all large companies as defined by the Companies Act 2006. This includes companies that meet two or more of the following criteria:

• Annual turnover with £36 million or more
• Balance sheet with total of £18 million or more
• More than 250 employees

Here’s what you need to know about SECR

Basic Concept: SECR requires large businesses to report their energy use and carbon emissions in their annual reports, alongside their financial parameters. The aim is to encourage companies to become more energy-efficient and reduce their carbon footprint. For more detailed information about SECR you can follow this link.

Reporting Requirements: Under SECR, large companies are required to report their energy use and Carbon emissions for the previous financial year, as well as their energy efficiency measures and the methodology used to calculate their energy use and emissions. The reporting requirements apply to companies that meet the required criteria.

Scope: SECR applies to all large companies that are incorporated in the UK and are required to file annual reports with Companies House. The reporting requirements apply to the company’s own energy use and emissions, as well as any energy supplied to the company by a third party.

Who is required to report under SECR?

All large companies that meet the qualifying criteria are required to report under SECR. This includes companies that are registered in the UK and those that are registered overseas carry out the business activities in the UK. Companies that are not registered in the UK subsidiary that meets the qualifying criteria must also report under SECR.

What Information needs to be Reported under SECR?

Under SECR, businesses are required to report on their energy use, GHG emissions, and energy efficiency measures. The following information must be included in the SECR report:

Energy Consumption: Businesses must report their total energy consumption for the financial year, broken down by fuel type (e.g. electricity, gas, etc.) and expressed in kWh.

GHG emissions: Businesses must report their total GHG emissions for the financial year, broken down by scope (e.g., scope 1, scope 2, scope 3), and expressed in tonnes of CO2.

Energy Efficiency Measures: Businesses must report on the energy efficiency measures that they have implemented during the financial year. This includes measures such as the installation of energy-efficient lighting, insulation, and renewable energy systems.

How do Businesses Comply with SECR?

Businesses can comply with SECR by including the required information in their annual reports. The SECR report must be prepared in accordance with the SECR guidance published by the UK Government. The report must be signed by a director or member of LLP and must be included in the company’s annual report.

In addition to the SECR report, businesses must also disclose their intensity ratio in their annual reports. The intensity ratio is the company’s GHG emissions ratio to its turnover. This information must be provided for each financial year covered by the SECR report.

What are the Benefits of SECR?

SECR has several benefits for businesses, including:

Improved Energy Efficiency: SECR encourages businesses to implement energy efficiency measures, which can help them to reduce their energy bills and improve their bottom line.

Enhanced Reputation: By reporting on their energy and carbon performance, companies can demonstrate their commitment to sustainability and environmental responsibility. This can help to enhance their reputation and attract customers who prioritize sustainable business.

Increased Transparency: SECR requires companies to disclose their energy consumption and carbon emissions in their annual reports. This increased transparency can help to build trust with stakeholders, including investors, customers, and employees.

Reduced Carbon Footprint: SECR can help to reduce a company’s Carbon footprint by identifying areas where energy efficiency improvements can be made. By reducing their Carbon emissions, companies can contribute to the fight against climate change and demonstrate their commitment to sustainability.

Compliance with Regulation: Compliance with Streamlined Energy and Carbon Reporting is a legal requirement, and failure to comply can result in fines and penalties.

Conclusion

Streamlined Energy and Carbon Reporting is a policy framework developed by the UK government to simplify and streamline the reporting of energy use and Carbon emissions for large businesses. Its aim is to encourage businesses to become more energy-efficient and reduce their Carbon footprint, while also providing stakeholders with more transparency and information about the company’s sustainability performance.