Streamlined Energy and Carbon Reporting (SECR) will come into place in April 2019 and will affect an undertaking’s financial accounting period commencing on or after this date
This new requirement comes as a result of the streamlined energy and carbon reporting consultation released at the start of 2018 - read our news story here from January 2018 for full details about the consultation content and the reasoning behind it. Large companies will be required to report on their energy consumption and associated greenhouse gas emissions annually in the Directors Report within the Company Accounts. Organisations will also need to report on any energy efficiency measures and state emissions with reference to intensity metric. The requirements are similar to the requirements of Mandatory Greenhouse Gas Reporting already in place for quoted companies. However, there are changes to the reported information for quoted companies too.
Who is obligated?
SECR applies to all quoted companies (who are already required to report via Mandatory GHG reporting), large limited liability partnerships and all large UK incorporated unquoted companies. Obligation is based on organisation size rather than energy use, although organisations meeting the qualification criteria below, but using less than 40,000 kWh per annum will not be required to report.
An organisation is considered large, and must comply if it meets at least two of the following criteria:
- 250 or more employees
- Turnover in excess of £36 million
- Balance sheet in excess of £18 million
NB: Please note these thresholds are different from those used for ESOS qualification. Click here to read more about ESOS and see the specific thresholds for ESOS Phase 2.
There are no exemptions or exclusions for companies holding Climate Change Agreements (CCA) or participating in the EU ETS.
What do obligated companies have to do?
Please note: Requirements for quoted and unquoted large companies under SECR are different.
To comply with SECR, the following must be disclosed in the Directors Report for unquoted companies:
- UK energy consumption: Electricity, gas and transport (as a minimum)
- Associated GHG emissions from the above sources
- At least one emissions intensity metric (e.g. tCO2e / £ turnover)
- Emissions over time; with the exception of the first mandatory reporting year, emissions data must be shown from the previous year
- A narrative on energy efficiency actions undertaken
Organisations already obligated under Mandatory GHG Reporting have been reporting global emissions and intensity metric since 2013. Quoted companies continue to be required to report their global GHG emissions. However, there is now an additional requirement to report on total global energy use and energy efficiency actions. Quoted companies must also report on the methodology used to calculate the data.
Table 1: Taken from Government Guidance Document - Environmental reporting guidelines, including streamlined energy and carbon reporting guidance
How can we help?
All information included in the reports must be fully auditable and based on evidential records (e.g. invoices). In particular, it is worth considering utilising an established published methodology for quantifying Green House Gas emissions (e.g. ISO 14064 and GHG protocol) to ensure reliable figures are reported. Comply Direct can help you to reduce the administrative burden and are able to offer bespoke packages covering all aspects of carbon reporting.
If you believe your company may be affected by SECR and you'd like to find out more about how we can support you to ensure compliance, please don't hesitate to contact our sustainability experts on 01756 794 951 / firstname.lastname@example.org