Cracking the SECR Code: Your Guide to the Streamlined Energy and Carbon Reporting

Introduction:

Diving into the world of SECR (Streamlined Energy and Carbon Reporting) can be a game-changer for UK businesses, big or small. This article is your all-in-one guide to understanding and mastering SECR. You’ll gain insights into who needs to complete it, what is required, and how to streamline your reporting process. We’ll point you toward additional resources that demystify the critical elements and introduce you to our free Carbon calculator, a handy tool that gives you a head start in estimating your greenhouse gas (GHG) emissions. So, whether you’re gearing up for your first SECR report or looking to refine your approach, you’re in the right place to begin your journey towards a greener, more responsible future.

What is SECR: UK Streamlined Energy and Carbon Reporting?

Alright, let’s chat about SECR (Streamlined Energy and Carbon Reporting), the UK’s latest move in environmental reporting. Implemented on 1 April 2019, it’s the streamlined successor to its predecessors – the Carbon Reduction Commitment (CRC) Energy Efficiency Scheme and the Carbon Reporting Framework. Specifically it’s aimed at the bigger players, targeting large organizations and those in the public sector. SECR is also expanding the horizon from the previous CRC’s eligibility, with 11,900 UK businesses now finding themselves on the reporting roster from the CRC’s 4,000.

So, what’s the deal with SECR? Simply put, if you’re a sizable organization, you need to meticulously measure and report your energy use and GHG emissions, as well as efficiency measures you’ve taken on throughout the year. And it’s not just a ‘do it when you feel like it’ sort of thing. These figures need to be reported annually to the authoritative eyes of Companies House and the Environment Agency.

The stakes are high – if you miss the mark on SECR, you might just find yourself facing some serious fines and other penalties. Why all the fuss? Well, it’s not just about keeping the government happy. This framework is all about driving businesses to take a hard look at their energy use, cut down on emissions, and align them with broader UK sustainability targets. 

The business opportunity, however, is not just for the big corporations. Businesses of all sizes can get in on the action, tracking their energy and carbon footprints and making moves to lessen their environmental impact.

Who needs to comply with the SECR framework?

So, who’s invited to the SECR party? It’s not just any company, but a specific set. If your business is UK incorporated and is on the London Stock Exchange’s Main Market, you’re in. The same goes for those listed on The International Stock Exchange (TISE) and the UK Real Estate Investment Trusts (REITs).

It’s also for any large company that’s required to publish an annual report under the Companies Act 2006. When we say ‘large’ as per the Companies Act 2006, we’re talking about meeting at least two out of these three criteria:

1. Turnover over £36 million
2. Assets worth more than £18 million
3. Team of 250 or more employees.

If your company is ticking two of these boxes, SECR is knocking on your door. Even charities, not-for-profit companies or others undertaking public activities still need to comply if they meet the above criteria.

Can a Company Be Exempt from Reporting?

Navigating the SECR framework, you might wonder if your company could be exempt from reporting. Well, it’s possible. 

First off, if you’re running a small enterprise (as detailed above), you’re in the clear.

If your company had a year where energy use was low (40MWh or less) – you’re possibly exempt too.

SECR Reporting 101: What’s on the checklist?

SECR boils down to this: companies need to report three main metrics and provide two types of explanations: 

Companies need to report:

• Total Energy Consumption: whether electricity, gas, oil or any other energy forms powering their operation; as well as purchased energy. For unquoted companies and LLPs, it also includes fuel used for business travel in rental or employee-owned vehicles in UK
• Greenhouse Gas (GHG) Emissions – Annual global Greenhouse gas emissions –  reported in CO2e. This includes Scope 1 (the energy you control) and Scope 2 (the energy you purchase). Read our Beginner’s Blueprint to Scope 1, 2, and 3 Emissions to know what those are.  
• Emissions Intensity Ratio: An intensity ratio simply means measuring your emissions against a key part of your business. Think of it as putting your emissions on a scale that makes sense for your company.
• Energy Efficiency Commentary: A narrative on the steps you’ve taken over the last year to enhance energy efficiency across your operations and infrastructure.
• Methodology Explanation: A clear description of how you’ve calculated your energy use, emissions, and intensity ratio, ensuring transparency and accuracy in your reporting.

Pro Tips for your SECR

1. Historical Data – Don’t forget to put in a look-back at your previous year’s figures. It gives context and shows your progress.
2. Your Calculation Playbook  – Detail the methodology you’ve used for calculating your energy usage and emissions. 
3. Showcase Your Improvements – Include a section highlighting all the energy efficiency measures you’ve implemented in the reporting period.
4. Seek External Verification: To ensure your data is consistent, consider getting it externally verified. It’s a seal of approval on your report’s accuracy.

Where and when do you report SECR?

If your company is part of the eligible criteria described above, you need to include within your annual directors’ report.  For charitable companies, it should be in the combined directors’ and trustees’ annual report.

The schedule for your SECR reporting is aligned with your company’s fiscal year-end. Since the requirements kicked in from 1 April 2019, businesses with a financial year starting on or after this date are expected to incorporate SECR information in their annual reports.

Ready to dive into your first SECR report?

Our Carbon helps UK companies measure and manage their emissions – including creating SECR reports with methodologies that are precise and transparent. Get in touch with us. 

And if you’re just dipping your toes in the sustainability waters, why not start with an easy estimate of your Scope 1 and 2 emissions? Check out our free Carbon Snapshot calculator – it’s your first step towards a greener future.