What is Streamlined Energy and Carbon Reporting?
Streamlined Energy and Carbon Reporting (SECR) came into place on 1 April 2019 and affects an undertaking’s financial accounting period commencing on or after this date. This new requirement came as a result of a government consultation released at the start of 2018, following the recognition that a simplified energy and carbon reporting framework was needed.
Obligated companies are now required to report on their energy consumption and associated greenhouse gas emissions. Organisations will also need to report on any energy efficiency measures and state emissions with reference to an intensity metric. The requirements are similar to the requirements of Mandatory Greenhouse Gas (GHG) Reporting previously 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 were previously required to report via Mandatory GHG reporting), large limited liability partnerships and large UK incorporated unquoted companies. Limited liability partnerships and UK incorporated quoted companies are considered to be large and must comply with the legislation if they meet two of the qualification criteria below. Organisations 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: 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.
Large Unquoted Companies and LLPs
To comply with SECR, the following information must be disclosed in the Director’s Report within Company Accounts for unquoted companies, or in an Energy and Carbon Report for LLPs:
- UK energy use: electricity, gas and transport (as a minimum)
- Associated GHG emissions
- 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
- Information on the methodology used to calculate the above
Quoted companies have been reporting global emissions and an intensity metric since 2013 under Mandatory GHG Reporting. Quoted companies continue to be required to report their global GHG emissions. However, in line with large unquoted companies there is now an additional requirement to report on total global energy use, energy efficiency actions and the methodology used to calculate the data.
A summary of the above reporting requirements for both quoted and unquoted companies are displayed in the table below:
Table 1: Taken from Government Guidance Document - Environmental reporting guidelines, including streamlined energy and carbon reporting guidance
When do obligated companies need to act?
Quoted companies will have been reporting on GHG Emissions since 2013.
For large unquoted companies and large LLPs, the regulations apply to reports for financial years starting on or after 1 April 2019. For those with a financial year 1 April to 31 March, the first financial year for which the relevant Report must comply with the new requirements is 1 April 2019 to 31 March 2020. Therefore, data gathering will need to begin promptly.
How can Comply Direct help?
All information included in the reports must be fully auditable and based on evidential records (e.g. invoices). As you are required to provide information on the methods used to calculate your reporting, it is important to consider the methodology used to calculate your emissions. We can assist in calculating your energy use and quantifying emissions in line with the Greenhouse Gas Protocol; an established and globally respected method. We will also help you to compile an evidence pack, to verify your reporting. As with all Comply Direct services, we will ensure compliance is easy and hassle free.
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 – email email@example.com or call 01756 794 951