SECR: A Practical Guide to Streamlined Energy and Carbon Reporting Requirements

This guide will provide you with an overview of SECR and what you need to do to comply with the regulations.

What is SECR?

SECR stands for Streamlined Energy and Carbon Reporting. It is a mandatory reporting framework for UK companies that was introduced by the government in April 2019. The aim is to help businesses reduce their energy consumption and carbon emissions by providing them with a clear understanding of their energy usage and emissions, and how to make improvements.

SECR replaced the previous Carbon Reduction Commitment (CRC) Energy Efficiency Scheme. However, unlike the CRC, which only applied to large energy consumers, SECR applies to a wider range of companies. The framework requires companies to report on their energy consumption, greenhouse gas (GHG) emissions and energy efficiency measures in their annual reports.

SECR Requirements

The SECR reporting threshold is based on a combination of factors, including the size of a company, their energy consumption and the amount of GHG emissions they produce. If a company meets two of the following criteria, they will be required to comply with SECR:

• They have at least 250 employees.
• They have an annual turnover of £36 million or more.
• They have an annual balance sheet total of £18 million or more.

In addition to these criteria, companies that consumed 40,000 kWh or more of energy during the reporting period will also be required to comply.

SECR Compliance

If your company meets the reporting threshold, you will be required to comply with the regulations. This means you will need to report on your energy consumption, GHG emissions and energy efficiency measures in your annual report.

To comply with SECR, you will need to:

• Calculate your energy consumption and GHG emissions for the reporting period.
• Include a narrative on your energy efficiency measures.
• Report on the intensity ratio of GHG emissions to turnover.
• Compare your energy consumption and GHG emissions to the previous reporting period.

SECR reporting must be done annually, and companies must include the information in their annual reports filed with Companies House. In addition, the information must also be displayed on the company’s website.

SECR Reporting Guidance

To comply with SECR, companies must follow a specific reporting process. This process includes:

1. Identifying the scope of the report – this includes the companies or entities that will be included in the report and the time period that will be covered.
2. Collecting data on energy consumption and GHG emissions – companies will need to collect data on their energy consumption and GHG emissions for the reporting period.
3. Calculating energy consumption and GHG emissions – companies will need to use the data collected to calculate their energy consumption and GHG emissions for the reporting period.
4. Reporting on energy efficiency measures – companies will need to include a narrative on their energy efficiency measures in their annual report.
5. Comparing energy consumption and GHG emissions to the previous year – companies will need to compare their energy consumption and GHG emissions to the previous year’s figures.
6. Disclosing SECR information – companies must include the information in their annual reports filed with Companies House, and also display the information on their website.

Benefits

There are several benefits to complying with SECR. These include:

• Improved energy efficiency – by reporting on energy consumption and GHG emissions, companies can identify areas where they can make improvements to reduce their energy usage and carbon emissions.
• Cost savings – by identifying areas where energy usage can be reduced, companies can make cost savings on their energy expenditure.
• Improved reputation – by demonstrating a commitment to reducing carbon emissions, companies can improve their reputation and enhance their brand image.
• Compliance with regulations – complying with SECR ensures that companies meet the mandatory reporting requirements and avoid any penalties for non-compliance.

Challenges

While there are benefits to complying, there are also challenges that companies may face. These include:

• Data collection – collecting accurate data on energy consumption and GHG emissions can be time-consuming and challenging, particularly for companies with complex supply chains.
• Reporting accuracy – ensuring that the reported data is accurate can be difficult, and errors could result in penalties for non-compliance.
• Meeting reporting deadlines – companies must ensure that their reporting is submitted on time, which can be challenging if data is collected from multiple sources.

SECR Tips

To make SECR reporting more manageable, there are several tips that companies can follow. These include:

• Start early – collecting data and preparing for SECR reporting should be done well in advance of the reporting deadline.
• Ensure data accuracy – it is essential to ensure that the data collected is accurate and reliable.
• Seek expert advice – if in doubt, seek expert advice from a specialist in SECR like McGrady Clarke.

How can we help?

In summary, SECR is a mandatory reporting framework for UK companies that aims to reduce energy consumption and carbon emissions by providing companies with a clear understanding of their energy usage and emissions. SECR reporting is required annually for companies that meet the reporting threshold, which is based on a combination of factors, including company size, energy consumption and GHG emissions. While complying with SECR can be challenging, there are benefits to be gained, including improved energy efficiency, cost savings, and an enhanced reputation. To make SECR reporting more manageable, book a consultation with one of our experts here at McGrady Clarke to assist you with your SECR reporting.