This guidance was updated in January 2021
Streamlined Energy and Carbon Reporting (SECR) is a mandatory reporting scheme that requires qualifying UK companies to prepare and file energy and carbon information in their Directors’ Report. SECR came into effect in April 2019.
Why was it introduced?
SECR was introduced by the UK Government in April 2019 under The Companies (Directors’ Report) and Limited Liability Partnerships (Energy and Carbon Report) Regulations 2018 with the intention of streamlining, and as a result simplifying, emissions reporting requirements for qualifying organisations.
What does it replace?
For a number of organisations, SECR replaces the Carbon Reduction Commitment (CRC) Energy Efficiency Scheme that ended in 2019. The scheme also replaces and extends Mandatory Greenhouse Gas Reporting (MGHG), which requires quoted companies only to report their annual GHG emissions.
You must comply with SECR if you are:
- A quoted company
- A “large” unquoted company or
- A Limited Liability Partnership (LLP)
Quoted companies are those whose shares can be bought or sold on the stock exchange. A “large” unquoted company is defined as one which satisfies two or more of the following requirements:
- An annual turnover of £36 million or more
- A balance sheet total of £18 million or more
- 250 or more employees
What about Low Energy Users?
Low Energy Users are defined as companies who fit the above criteria but consume 40MWh or less during the reporting period. Low Energy Users are not required to disclose energy and carbon information, however, they are required to state why it is not being disclosed.
To comply with SECR, qualifying companies must disclose:
- Their energy use and greenhouse gas (GHG) emissions for their financial year / reporting period
- At least one intensity ratio
- A ‘narrative description’ of any energy efficiency actions taken
- The methodology used to calculate the required information
What if I am already reporting through ESOS?
The Energy Savings Opportunity Scheme (ESOS) and SECR are two separate pieces of legislation with different aims and timelines. ESOS is mandatory for large companies whereby they must submit an energy report to the Environment Agency every four years.
Where should companies report?
Qualifying companies will need to include information on carbon and energy use as part of their annual accounts in line with the SECR framework in their Directors’ Report, or an equivalent Energy and Carbon Report for LLPs, for financial years beginning on or after 1 April 2019. The disclosure may be made in the Strategic Report instead, however a statement in the Director’s report should be made to indicate and explain this decision.
What if I can’t obtain the information?
If energy and carbon information is not practical to obtain, you can exclude this information from your report. However, you must state what information is excluded and say why. BEIS recommends that you set out the steps you are taking to acquire the information.
Anthesis supports businesses to help meet their SECR requirements.
SECR reporting has been mandatory for financial reports since April 2019. Reporting deadlines are in line with that of your annual filings for the qualifying financial year.
We help our clients to understand what their data is telling them so that the information disclosed in corporate reports is meaningful, and motivational to staff, customers and other stakeholders.
We have been assisting clients for many years to realise the benefits of sustainable operations, and compliance just becomes a minor task within the wider approach. Our experienced team have a long history of delivering similar projects related to MGHG, CDP and support organisations looking to implement the recommendations of the Financial Stability Board’s TCFD. Anthesis offers professional SECR guidance to help companies successfully report on their energy and carbon emissions.
If you are unable to meet your company accounts filing deadline due to COVID-19, you may apply for up to a 2-month extension. Please note that you must apply for the extension before the report is due. See Government guidance for more information.
As you don’t require a site visit for SECR, we can still support you to complete your SECR report on time. However, as the data collection required may take longer to complete in current conditions, and multiple companies seeking an extension may lead to an increase in demand for support, we recommend that you start the SECR process as soon as possible.
We would be delighted to discuss how we can support you to complete your SECR report.
Understand how SECR will affect your business and the relevant disclosure requirements.