SECR - Streamlined Energy and Carbon Reporting
What is SECR?
The UK government closed the Carbon Reduction Commitment (CRC) Energy Efficiency Scheme and as a replacement introduced the Streamlined Energy and Carbon Reporting (SECR) on 1st April 2019. The new regulations make it mandatory for large businesses to annually report on their energy and carbon emissions and then report on any efficiency measures they are taking to show continual annual improvements.
It is estimated that these new regulations will affect between 13-14,000 organisations which is a far greater number than the previous CRC scheme, this is due to the new qualifying factors.
Who needs to comply?
All quoted companies in the UK need to comply if they meet the determining factors that qualify them as a Large business.
Any two of the following are definitions of being a Large business:
- More than 250 employees
- Annual turnover of more than £36m
- Annual balance sheet of over £18m
It is also encouraged that public sector, SME and other private sector organisations that currently fall outside of the scope should voluntarily report in a similar manner.
Note: There is an exemption if you can evidence that you consume less than 40MWh
Why has SECR been implemented?
The UK Government have made a commitment to reduce our countries GHG output to a level 80% lower than recorded in 1990 by 2050. In order to meet these targets, the SECR and other policies such as ESOS, CCA/CCL have been created to help measure, monitor and improve our emissions in an efficient way.
The introduction of the SECR will:
- Increase awareness of energy use within large and quoted organisations.
- Create a reporting structure that will give a level playing field among organisations in terms of energy and emissions reporting.
- Provide organisations with the scientific data to be able to react and create opportunities to reduce their impact on climate change.
- Enable organisations to show a year on year decrease in GHG which will help make a business more investable and maybe more importantly reduce operating costs.
When is SECR reporting required?
The first SECR period is now over and subsequent reports were expected to be published after 1st April 2020. This is dependent on and ideally should fall in line with your annual financial reporting period.
What does SECR mean for your business?
If you meet the definitions of being a Large business, you will be automatically entered into the SECR scheme. You will be expected to make your energy use, carbon emissions and your energy efficiency actions publicly available; these metrics should be published alongside or as part of your Annual Reports.
What are the key SECR reporting requirements?
- The report should be included within the Directors’ Report as part of annual filing obligations.
- For LLPs (where a Directors Report is not issued) a separate “Energy and Carbon Report” shall be issued.
- For charitable companies the report should be included within the “Directors and Trustees’ Annual Report”.
- SECR does not impose a specific reporting template but does reference reporting structures such as ISO 14064-1 and the GHG Protocol Corporate Standard.
- SECR encourages the reported year of energy and emissions matches the organisations financial year.
The important information you should be disclosing on your report should include
- Scope 1 – Stationary combustion (gas)
- Scope 1 – Mobile combustion
- Scope 2 – Purchased energy use
- UK energy use – including Scope 1
- Annual GHG emissions + previous year
- Emissions intensity ratio
- Narrative on energy efficiency action
- Methodology
To learn out more about SECR, the UK government recently published its guidance notes which can be found here.
Read more about how UL can make your carbon reporting journey easier here on the Turbo Carbon website.
