SECR Guidance: Concept’s Guide to Streamlined Energy and Carbon Reporting
Download our 2023 SECR Guide
Find out what your obligations are under the new SECR scheme – and how to make the most of compliance.
Concept’s Guide to Streamlined Energy and Carbon Reporting
SECR is a mandatory energy and carbon reporting scheme for larger companies that came into effect in April 2019.
As its name suggests, it was introduced to reduce duplication in carbon reporting for businesses, and the Carbon Reduction Commitment (CRC) was abolished as part of these reforms.
SECR aims to give organisations a clearer picture of their energy use, incentivising carbon reduction. There is a reputational driver too – reports are publicly available, allowing increased transparency for investors and other stakeholders.
The reported data also helps to inform government plans for meeting its carbon targets, and achieving net zero emissions by 2050.
Who does it affect?
SECR applies to quoted companies, large unquoted companies, and large LLPs.
‘Large’ is defined by the Companies Act as having at least two of the following:
- A turnover of £36 million or more.
- A balance sheet total of £18 million or more.
- 250 employees or more.
What about the public sector and charities?
You, or part of your organisation, may fall within the scope of SECR even if undertaking public, or not for profit activities – for example, as registered companies or companies/LLPs owned by universities or NHS Trusts. Academy trusts also fall within scope and are expected to comply.
However, you’re not required to report under the SECR framework at an organisational level if your organisation is defined as a public body. You may still have other reporting requirements such as those under the Greening Government Commitments.
What if my organisation is part of a group?
If your company is a group subsidiary, you can choose to either report independently, or include your data in parent company figures.
Your annual report should include either your SECR data, or a statement to say it is included in the parent company’s report
What if I’m already reporting under ESOS?
Some organisations will be eligible for both ESOS and SECR. Participation in schemes such as the CRC and ESOS means that some companies will already have robust accounting and environmental management systems in place to help with reporting on SECR.
Details
What do I need to report on?
Quoted companies need to report on:
- Annual global emissions for which your company is responsible, e.g. purchased electricity or gas, or emissions from boilers, furnaces and vehicles you own.
- The underlying global energy use.
- Previous year’s figures (except in the first year).
- At least one intensity ratio
- Energy efficiency action taken during the financial year.
- Methodology used
- What proportion of your total energy consumption and emissions relate to the UK (including the UK offshore area).
Unquoted companies and LLPs need to report on:
- Annual emissions from UK energy use (as a minimum electricity, gas and transport).
- The greenhouse gas emissions associated with your energy use.
- Previous year’s figures (except in the first year).
- At least one intensity ratio
- Energy efficiency action taken during the financial year.
- Methodology used.
- UK offshore undertakings must disclose emissions and energy use for the UK and the UK offshore area.
What types of transport energy use are included?
Like ESOS, SECR requires you to report on energy use from company vehicles you own or control (your fleet). It excludes, for example, staff business travel by train, plane or taxi.
Large unquoted companies and LLPs must also report on business travel in rental cars or employee-owned vehicles where they are responsible for purchasing the fuel. This is voluntary for quoted companies, but strongly encouraged.
Do I need to report on energy efficiency actions taken?
You must include a ‘narrative description’ of the steps your company has taken in the last financial year to reduce your carbon footprint. For example, installing smart meters or replacing business travel with video conferencing.
What to include in the statement is up to you, but the guidance says it should be ‘meaningful and informative’, consistent with the size and level of energy use of the business.
What if I’m a low energy user?
Low energy users don’t need to report on their energy and carbon information. But you do have to state in your financial report why you are not disclosing this information.
A low energy user is defined as consuming 40MWh or less during the reporting period.
What if I can’t obtain the information required?
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.
You can also omit energy and carbon information if you consider that it would be seriously prejudicial to the interests of the organisation. Again, you must state why in your report.
SECR Dates, deadlines and where to report
When to report?
SECR is annual and has been part of financial year reporting since 1st April 2019.
The deadline for your latest SECR report depends on what financial year your organisation uses; it should be submitted with your company accounts. Check with your finance director or company secretary if you are unsure.
As an example, if your usual reporting year is 1 April to 31 March, your next SECR report should be aligned with that period.
Where do I need to report on SECR?
SECR requires you to report on carbon and energy use as part of your annual accounts filed with Companies House.
You will need to include your organisation’s energy and carbon information in your Directors’ Report.
Large LLPs must prepare an equivalent report to the Directors’ Report (the “energy and carbon report”) for each financial year, including energy and carbon information.
Does my SECR report need to be independently verified?
The SECR legislation doesn’t require your data to be independently verified, but the guidance recommends it as best practice.
Who enforces SECR?
Enforcement lies with The Conduct Committee of the Financial Reporting Council – they have the power to look into cases that appear non-compliant, and apply to the Courts for an order requiring directors to prepare a revised report.
Reports may be rejected by Companies House if they don’t meet requirements – and where accounts are delivered late, civil penalties apply.
How Concept can help
Many organisations will be reporting on their energy use for the first time under SECR, and we understand it may be a steep learning curve.
- We can take care of the entire SECR compliance process, by advising you on your obligations, collating your data, and compiling your Energy and Carbon report.
- Where needed, we can work with you to compile your Greenhouse Gas Inventory for all emissions within scope.
- This is a yearly requirement – so we’ll help you to put procedures in place that simplify the data collection and reporting process. We can produce your methodology document, and review it each year afterwards, where necessary.
- We’ll help you use your SECR data to engage with c-suite decision makers and catalyse behaviour change. SECR requires you to report on energy efficiency measures taken – so there is a reputational incentive for taking action.
Beyond SECR
SECR can be a great starting point for driving energy efficiency improvements in your organisation. We can support you through this process, from detailed site visits and feasibility studies, through to advice on implementation.
Why choose Concept?
Concept Energy Solutions was established in 2008 and has grown to become a leading independent energy and water management consultancy.
We have a long history of helping our clients to achieve and maintain legislative compliance; we have significant experience and expertise in this area and are supporting many organisations with their SECR obligations.
Independence matters
Our commitment to delivering independent guidance is never compromised. In fact, we are not aligned to any company, technology or protocol.
- We have an open & honest approach.
- We guarantee an impartial solution on every project.
- We are committed to maintaining our integrity.
Get in touch
If you need advice on SECR and would like to talk to one of our experts, call us on 01256 303620 or email info@conceptenergy.org