Streamlined Energy and Carbon Reporting (SECR)

Streamlined Energy and Carbon Reporting (SECR) is an essential policy for businesses to track and disclose their energy consumption and carbon emissions. In this article, we will explore the key aspects of SECR, its requirements, and why it matters for organizations.

What is SECR reporting?

SECR reporting refers to the mandatory reporting framework implemented by the UK government to enhance transparency and accountability regarding energy usage and carbon emissions. It was introduced as part of the Companies (Directors' Report and Qualified Persons) and Limited Liability Partnerships (Amendment) (EU Exit) Regulations 2019.

SECR is important for organizations because it enables them to measure and disclose their energy consumption, greenhouse gas emissions, and energy efficiency measures. By doing so, businesses can demonstrate their commitment to sustainability, attract environmentally conscious investors, and contribute to global efforts to combat climate change.

Who has to report under SECR?

Under SECR, certain types of businesses are obligated to report their energy and carbon data. This includes:

•  companies with 250 or more employees
• an annual turnover exceeding £36 million
• a balance sheet total exceeding £18 million. 

Additionally, large unquoted companies and limited liability partnerships (LLPs) meeting two or more of these criteria are also required to comply with SECR reporting.

Requirements

The following are the key requirements for organizations reporting under SECR:

Are there any exemptions?

Certain circumstances exempt businesses from SECR reporting. These exemptions include companies not registered in the UK, organizations that are fully covered by the Climate Change Agreement (CCA), and those whose energy use is less than 40,000 kWh during the reporting period. Additionally, if a parent company has already provided a group report that includes the subsidiary's energy and carbon data, the subsidiary may be exempt from reporting.

Comply or explain

SECR follows the "comply or explain" principle, which means that businesses must either comply with the reporting requirements or provide an explanation if they are unable to do so. This approach ensures transparency and encourages organizations to take responsibility for their energy consumption and carbon emissions.

Why Streamlined Energy and Carbon Reporting matters

Streamlined Energy and Carbon Reporting (SECR) offers several benefits for businesses, even if reporting is not mandatory. By voluntarily disclosing their energy usage and carbon emissions, organizations can:

• Enhance their reputation - Demonstrating environmental responsibility and sustainability practices can improve the brand image and reputation of businesses.
• Attract investors - Investors are increasingly prioritizing companies with robust sustainability initiatives. SECR reporting can help attract environmentally conscious investors.
• Identify cost-saving opportunities - Monitoring energy consumption can lead to identifying potential cost-saving measures and improving energy efficiency within the organization.
• Align with global sustainability goals - By participating in SECR, businesses contribute to global efforts to mitigate climate change and achieve sustainability targets.

Minimum can help organizations to understand their existing carbon output, and create plans to mitigate climate related risks in the future.  Our Emissions Data Platform seamlessly collects and processes emissions data from every corner of your organization and supply chain - no matter the format. Making it the ideal platform for emissions audits and all-round business intelligence. 

Learn more about how Minimum's Emission Data Platform can help to power you all the way to Net Zero today.  

FAQs about SECR

When was SECR introduced?

SECR was introduced as part of the Companies (Directors' Report and Qualified Persons) and Limited Liability Partnerships (Amendment) (EU Exit) Regulations 2019.

Do the public sector and charities report on SECR?

No, the SECR reporting requirements primarily apply to companies and limited liability partnerships in the private sector. However, public sector organizations and charities are encouraged to voluntarily disclose their energy usage and carbon emissions as part of their sustainability initiatives.

How to report on SECR?

Reporting on SECR requires organizations to collect and compile relevant data on energy consumption, greenhouse gas emissions, and energy efficiency measures. This information is then included in the annual Directors' Report, forming part of the company's financial reporting.

Is SECR mandatory?

Yes, SECR reporting is mandatory for certain types of businesses, including those with 250 or more employees, an annual turnover exceeding £36 million, or a balance sheet total exceeding £18 million. Large unquoted companies and limited liability partnerships (LLPs) meeting specific criteria are also obligated to comply with SECR reporting.