Streamlined Energy and Carbon Reporting (SECR) is a UK government framework designed to increase transparency around energy use and carbon emissions for large businesses. It requires organisations to report their energy consumption, greenhouse gas (GHG) emissions, and energy efficiency measures annually in their financial reports. SECR was introduced in April 2019 to replace the Carbon Reduction Commitment (CRC) Energy Efficiency Scheme and broaden the scope of reporting to more companies.
Who Needs to Comply with SECR?
SECR applies to three types of UK organisations:
- Quoted companies listed on a UK, EU, or international stock exchange.
- Large unquoted companies that meet two out of three of the following criteria:
- 250+ employees
- £36+ million annual turnover
- £18+ million in total assets
- Large LLPs (Limited Liability Partnerships) that meet the same financial criteria.
Small and medium-sized enterprises (SMEs) are not required to report under SECR but are encouraged to voluntarily track and reduce their carbon footprint.
What Must Be Included in an SECR Report?
Organisations required to comply must include the following in their annual Directors' Report or Energy and Carbon Report (for LLPs):
- Total energy use (electricity, gas, and transport fuel)
- GHG emissions in CO₂ equivalent (CO₂e) for Scope 1 & 2
- Scope 3 (indirect) emissions if feasible (e.g., business travel, supply chain)
- Energy efficiency measures taken in the reporting year
- Methodologies used to calculate energy and emissions
- Intensity metrics, such as emissions per revenue or per employee
How Can I Prepare for SECR Reporting?
To comply with SECR, businesses must collect, calculate, and report accurate energy and emissions data. Follow these steps for smooth and successful reporting:
1. Gather Your Energy Data
- Start by collecting data on electricity, gas, and transport fuel usage across all business operations.
- Review utility bills, fuel receipts, fleet mileage records, and business travel expenses to ensure accuracy.
- If you work with multiple sites or suppliers, coordinate with them to obtain consistent and reliable data.
2. Calculate Your Carbon Emissions
- Convert energy consumption (kWh, litres, miles) into CO₂e emissions using UK Government conversion factors.
- Use a trusted carbon calculator, such as the Green Circle Solutions Carbon Calculator, to simplify this process.
3. Identify Energy Efficiency Improvements
- Document any actions taken to reduce energy consumption, such as switching to LED lighting, upgrading to energy-efficient equipment, or improving building insulation.
- If no improvements were made, an explanation is required in your SECR report.
4. Choose an Intensity Metric
- SECR requires an intensity ratio (e.g., emissions per employee, per £million revenue, or per square meter of office space).
- Select a metric that is most relevant to your business activities.
5. Prepare Your Report & Submit It
- Ensure your SECR disclosures are included in your annual Directors' Report or LLP Energy & Carbon Report.
- If you’re unsure, work with a sustainability consultant or reporting specialist, such as Green Circle Solutions.
Common Pitfalls & How to Avoid Them
- Inaccurate data collection: Failing to track all energy use can lead to errors. Use automated carbon tracking tools to streamline this process.
- Lack of internal engagement: Engage key departments (finance, operations, and facilities management) to ensure comprehensive data collection.
- Forgetting to include energy efficiency measures: Even small improvements, such as employee awareness campaigns, should be reported.
- Choosing the wrong intensity metric: Pick a metric that aligns with your business operations and allows for meaningful year-on-year comparisons.
What Happens if I Don’t Comply?
Failure to comply with SECR could result in:
- Financial penalties from the UK’s Financial Reporting Council (FRC).
- Reputational damage due to lack of transparency in sustainability reporting.
- Missed opportunities for cost savings by not identifying energy efficiency improvements.
- Potential loss of business opportunities, as more clients demand sustainability compliance from their supply chain.
How Can Green Circle Solutions Help?
Green Circle Solutions provides expert guidance and digital tools to help businesses simplify SECR compliance. Here’s how we support companies:
- Carbon Calculators: Our easy-to-use tools helps track, calculate, and report emissions, ensuring accuracy and efficiency.
- Trusted Consultancy Services: We provide one-on-one support to help businesses interpret SECR requirements and implement energy-saving strategies.
- Data Collection & Analysis: We help companies gather energy data, apply the correct conversion factors, and generate SECR-compliant reports.
- Employee Engagement: We assist in educating teams about SECR and sustainability, ensuring company-wide commitment to energy efficiency.
- Communicating: Winning hearts and minds of stakeholders is key. We help with internal and external communications including sustainability reporting.
Conclusion
SECR is not just a compliance obligation—it’s an opportunity to improve energy efficiency, cut costs, and demonstrate leadership in sustainability. By preparing early, using carbon tracking tools, and partnering with experts like Green Circle Solutions, businesses can ensure compliance with minimal hassle while gaining valuable insights into their environmental impact.
Want to make SECR reporting easy and stress-free? Contact Green Circle Solutions for expert support today.