What is the SECR Reporting criteria?

UK private sector organisations must met the SECR legalisation if they are quoted companies on the London Stock Exchange regardless of FTE or turnover. Large non-quoted UK Company and large Limited Liability Partnerships (LLPs) you must report SECR if they employ over 250 people and have a turnover of £36m or an annual balance sheet in excess of £18m.

Streamlined Energy and Carbon Reporting (SECR)

Q: What is the aim of SECR?

The aim of SECR is to accurately carbon footprint businesses and to provide a measurement index and commentary about how to reduce their carbon footprint moving forward. It is a piece of energy legalisation with the aim of supporting the UK Government’s Climate Change Act and promise of Net Zero by reducing UK carbon emissions by 80% by 2050.

Q: Who is responsible for SECR?

Senior managers in finance or general managers are responsible for filing annual reports where SECR is included. Reporting can be performed in-house or by outsourcing to an energy consultant.

Q: When should I conduct a SECR audit?

Anytime, as long as it can be included in your annual accounts when they are due. However, If you conduct your SECR reporting earlier in the year, and not at the same time as your annual accounts, you are prepared to present this carbon report with the rest of the financial audit and avoids conducting both reports at the same time.

Q: What Transport Energy is covered in the SECR reporting framework?

Transport should only include fuel that the organisation has purchased itself such as the use of company cars, fleets and private/hire cars, and employees reimbursing their own milage on behalf of the organisation.

Save time and ensure SECR compliance with the support of Professional Energy Services.

What is SECR?

SECR stands for Streamlined Energy and Carbon Reporting. It is a carbon reporting scheme put out by Ofgem to ensure that businesses of a certain size are reporting their energy consumption and associated greenhouse gas emissions in their financial accounts. The SECR reporting legislation has been introduced to make carbon reporting more transparent as businesses work towards the government goals of net-zero carbon emissions. Organisations need to demonstrate their energy efficiency actions and display their emissions against an intensity metric.

SECR replaced the Carbon Reduction Commitment (CRC) Energy Efficiency Scheme that was for a small percentage of large energy users and ended on 31 March 2019. The CRC scheme required all qualifying organisations to report energy and carbon emissions in their annual reports.

SECR extends the requirements of existing carbon legislation such as Mandatory Carbon Reporting (MCR) regulations and is mandatory for all eligible organisations.

Should my business be SECR Reporting?

Private sector organisations must meet the SECR legalisation if they meet the following criteria:

All UK-incorporated quoted companies on the London Stock Exchange regardless of FTE or turnover.

Large non-quoted UK Company and large Limited Liability Partnerships (LLPs) you must report SECR if they met the following:

employ over 250 people
have a turnover of £36m or an annual balance sheet in excess of £18m

To qualify you must hit at least 2 of those thresholds. If you hit just one, then you’re exempt from reporting.

Additionally, public sector organisations and low energy user private companies that can evidence they use less than 40 mWh in a year are exempt.

How to comply? – SERC requirements

SECR requires all businesses to include the following information in their annual Director’s report for financial years beginning on or after 1 April 2019.

energy use (electricity, gas and transport)
scope 1 and 2 greenhouse gas (GHG) emissions
at least one intensity metric (ratios comparing emissions data)
Emissions of the current and previous financial year so changes are clearly visible (with the exception being that your first mandatory reporting year won’t have last year’s data)
a narrative commentary on energy efficiency actions and any potential energy savings or disclosure of inaction if no measures were taken
the purchase carbon allowances to subsidise their carbon emissions
methodology on how the reported data was gathered and calculated used must be disclosed.

The above SECR reporting requirements differ for quoted companies and unquoted companies/LLPs:

Quoted Companies

As quoted companies are already reporting on scope 1 and 2 greenhouse gas (GHG) emissions under the mandatory GHG scheme, they need to also report on the underlying global energy use for the current period and demonstrate the difference between UK and offshore energy and carbon emissions.

Unquoted Companies and LLPs

Unquoted companies and LLPs have the minimum reporting requirements of just UK energy and Associated GHG emissions, (The measurements of GHG emissions should be in tonnes of carbon dioxide equivalent)

Reporting of scope 3 emissions (all indirect emissions not included in scope 2) will remain voluntary for both quoted and unquoted companies.

Carbon Allowances

SECR also requires organisations to purchase carbon allowances to subsididse 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.

Therefore, Climate Change Agreements (CCAs) have become a lot more important to businesses as they aim to ease the impact of CCL costs on manufacturing and industry, giving CCL relief in exchange for a commitment to improve energy efficiency.

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How long does it take to perform SECR?

The most time-consuming element of SECR reporting is gathering all the information and data required to accurately footprint the business. With gas and electricity for buildings, if you’re using an energy consultant, it is likely that all your energy consumption data is already captured and stored in a central online repository, saving huge amounts of time.

Travel is a key factor that needs to be calculated and it presents its own challenges. For example, its common to consider the following:

What type of company vehicles the business owns or hires.
The amount of mileage being claimed by employees in their own vehicles on behalf of the business.
The total mileage of the above
What types of car and specific details to determine their fuel efficiency such as:
- engine type and size
- literage
- petrol or diesel fuel

All of these factors must be collected and with the appropriate conversion factors applied to it to be able to produce an accurate carbon footprint.

Save time and ensure compliance by outsourcing your SECR reporting

SECR reporting can be time consuming and complex for any business owner. By outsourcing your commitment to report on your energy consumption you can avoid the risk of an unsuccessful application and save time to focus on other priorities.

When working with PES you will receive:

An energy and carbon report that guarantees compliance and meets the legal requirement for your business
The carbon footprint of your business that covers all the emissions including your travel costs such as mileage and fuel consumed.
A plan to reduce consumption to enhance your carbon management and increase energy efficiency measures
A well planned end of year financial audit as your SECR report is conducted earlier in the year
Time saved in the calculation and creation of the report as all your energy data is centralised using our energy management software
Support with the purchase of carbon allowances to cover your carbon emissions
Findings to aid compliance with other carbon initiatives such as Energy Saving Opportunity Scheme (ESOS)
An expert who is fully up to date on any energy legislative changes and related climate change policies

Benefits of completing SECR:

Become Lawfully Complaint

Improve your public image and green credentials as you demonstrate your commitment to reducing carbon emissions

Contribute to your environmental sustainability policy

Avoid your organisation being removed from companies register

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PES has helped hundreds of businesses across the UK with their carbon reporting and improved the transparency of their energy efficiency actions. Get in touch today to learn more about how our team can support your energy and carbon reporting requirements.

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Frequently Asked Questions on SECR

Why was SECR created?

SECR was created to make energy and carbon reporting simpler, by aligning with existing reporting requirements, the burden of energy reporting and energy compliance requirements on organisations is reduced. It will also contribute to the government’s Clean Growth Strategy ambition of enabling businesses and industries to improve their energy productivity by at least 20% by 2030.

What is the aim of SECR?

The aim of SECR is to accurately carbon footprint the business that covers all the scope of emissions that are in the SECR legislation, and to provide a measurement index and commentary about how to reduce the carbon footprint of that business moving forward. It is another piece of energy legalisation with the aim of supporting the UK Government’s Climate Change Act and promise of Net Zero by reducing UK carbon emissions by 80% by 2050.

Who is responsible for performing SECR?

Typically, senior managers in finance or general managers are responsible for filing annual reports where SECR is included. Reporting can be performed in-house or by outsourcing to an energy consultant

Will my business be notified if it meets SECR criteria?

Yes, the environmental agency does send out notice letters to companies that qualify. However, it is recommended companies do not rely on these letters as they may have multiple offices and the registered office may not have any employees who are solely responsible for carbon compliance legalisation.

When should I conduct a SECR audit?

If you conduct your SECR reporting earlier in the year, and not at the same time as your annual accounts, you are prepared to present this carbon report with the rest of the financial audit so it does not become too overwhelming conducting both at the same time.

Do I meet the SECR regulations if I’m a low energy user?

Large unquoted companies and LLPs do not need to report on their energy and carbon information if they can show that their energy use during the reporting period is less than 40 MWh.

What Transport Energy is covered in the SECR reporting framework?

Transport energy should only include fuel that the organisation has purchased itself such as the use of company cars, fleets and private/hire cars, and employees reimbursing their own milage on behalf of the organisation. However, journeys where the fuel is paid indirectly such as air, rail, bus, or taxi journeys (that the business doesn’t own), or fuel for the transportation of goods or equipment by third parties, wouldn’t be included.

What’s the deadline for SECR?

The deadline for SECR will be the same as when your financial accounts are due.

Are there penalties for SECR non-compliance?

SECR legislation has not clearly defined that there would be a financial penalty. However, it is heavily intimated that there would be consequences of financial nature. So far there is very little evidence in the public domain of examples of official fines being imposed for a lack of SECR reports.

The biggest penalty you should consider (in addition to missing out on the economic and environmental benefits), is that you would have a public record that your business is not complying with carbon legislation. That can cause damage to your brand, corporate social responsibility, green credentials, and potentially hinder you when competitively bidding for business.

Do I need to reduce emissions or offset carbon to comply to SECR?

No, SECR is a mandatory reporting framework for certain UK companies that meet the reporting criteria. It obligates these companies to report their energy usage and current carbon emissions but does not force them to reduce emissions or offset carbon. It simply encourages companies to take action as a way of achieving net zero emissions. However, companies that meet the SECR criteria are required to report on the actions they may already be taking to reduce their emissions, including any carbon offsetting schemes they are participating in.

Speak to our energy consultants and ensure SECR compliance in your annual report