Ensure your energy efficiency projects and carbon emissions are reportable and audit ready
SECR has replaced the Carbon Reduction Commitment (CRC) scheme that ended on 31 March 2019. The CRC scheme required all qualifying organisations to report energy and carbon emissions in annual reports. The legislation has been introduced to make carbon reporting more transparent as businesses work towards the government goals of net zero carbon emissions.
SECR extends the requirements of existing carbon legislation such as Mandatory Carbon Reporting (MCR) regulations and is mandatory for all eligible organisations.
You must conduct SECR reporting if your business meets the following criteria:
If you are a large non-quoted UK Company or LLP you must report SECR if you met the following:
SECR requires businesses to include their energy use (including electricity, gas and transport) emissions and an intensity metric in their annual Directors’ report for financial years beginning on or after 1 April 2019. The government will not specify the exact procedures that should be used for energy and carbon reporting, nor will they specify which intensity metrics to use. They will however create guidance on good practice. All SECR participants must provide a narrative commentary on energy efficiency action taken in the financial year.
Due to these requirements an organisations energy efficiency plans will now be in the public domain and therefore most be clear, concise and accurate to the level of energy use of that business.
Quoted companies must continue to report on scope 1 and 2 greenhouse gas emissions (direct greenhouse gas emissions from owned or controlled sources and indirect emissions generated by purchased energy). Additionally, they’ll be required to report on global energy use, where appropriate. Unquoted companies will now also be required to report scope 1 and 2 emissions. Reporting of scope 3 emissions (all indirect emissions not included in scope 2) will remain voluntary for both quoted and unquoted companies.
SECR also requires organisations to purchase carbon allowances to cover their carbon emissions. As a result, CRC charges were added to the Climate Change Levy (CCL) increasing the CCL on electricity to 0.847p/kWh, and the CCL on natural gas to 0.339p/kWh in 2019/20. Increases of 45% and 67% respectively.
Make Energy and Carbon Reporting Simpler
SECR has been designed to make energy and carbon reporting simpler, aligning with existing reporting mechanisms to reduce the burden of compliance requirements on organisations. It will also contribute to the government’s Clean Growth Strategy ambition of enabling business and industry to improve their energy productivity by at least 20% by 2030.
By completing your SECR reporting you will also: