SECR COMPLIANCE – Requirement & Opportunity

Streamlined Energy and Carbon Reporting (SECR) is the name the UK Government has for legislation which follows on from the Carbon Reduction Commitment (CRC). SECR came into legislation on 1st April 2019 and is designed to increase awareness of energy costs and usage, which now more than ever is a focus for business to keep in top of rising energy costs.

With growing pressures on business to drive down and understand their carbon emissions and to support the UK Government’s required climate change targets, SECR was introduced. It means that all large UK companies (including charitable organisations and now academy trusts) must report their carbon emissions and energy usage on an annual basis. The SECR regulation will require an estimated 11,900+ organisations in the UK to report their carbon and energy emissions.

Who needs to comply?

Three groups of organisations are impacted by the SECR regulation. All organisations that fall within the following criteria must comply:

All quoted companies of any size that are already obligated to report under mandatory greenhouse gas reporting regulations.

All unquoted companies incorporated in the UK that meet the definition of ‘large’ under the Companies Act 2006 will have new reporting obligations.

‘Large’ Limited Liability Partnerships (LLPs) will be required to prepare and file an ‘Energy and Carbon Report’.

Organisations or LLPs are defined as ‘large’ if they meet at least two of the following three criteria in a reporting period:

• an employee count of 250 or more

• a turnover of £36 million or more

• a balance sheet of £18 million or more

It is worth noting that the set criteria for ‘large’ differs from the ESOS criteria; ESOS Compliance does not meet the criteria for SECR Compliance, or vice versa.

Are there any exemptions?

An exemption exists for quoted or large unquoted companies and LLPs that can confirm their energy use is lower than – 40MWh or less over the reporting period. However, these companies will still need to include a statement in their report confirming that they are a low energy user.

What will you and your organisation need to report?

This depends on the type of organisation that you are. As the reporting requirements differ for quoted companies, large unquoted companies and LLPs.

Quoted companies must continue to report your global scope 1 and 2 GHG emissions in tonnes of carbon dioxide equivalent, and a chosen emissions intensity ratio in your director’s report for the current year and the previous reporting periods too. You will also be required to report the underlying global energy use for the current reporting year.

Unquoted large companies and large LLPs will need to report as a minimum, your UK energy use for gas, electricity and transport etc, and your associated GHG emissions, which will include at least one metric of intensity.

All quoted and unquoted companies and LLPs need to report GHG emissions, energy used and at least one emissions metric of intensity for the current and previous financial years. The report must include a description of which measures are taken to work towards improving the energy efficiency within that period and if possible, resulting energy improvements from the actions taken and reported.

Non mandated company opportunity

As SECR has been established for several years the demand for data, efficiencies, and collaboration to reach the net-zero ambition is being passed onto suppliers of reporting companies.

Having a carbon certification and SECR compliant report is a big opportunity for all businesses to demonstrate their ambition, tender for large opportunities and grow their business.

 

Whether you need to comply, want to make a positive environmental impact or grow your business, our services can provide your business the data, report and management service to achieve your ambition using market leading software and our outsourced environmental manager service, enabling you to sign up to the United Nations Race to Zero Campaign via the SBS Net-Zero program