Streamlined Energy and Carbon Reporting (SECR): Frequently Asked Questions
The Energy Advice Hub is powered by BiU, the UK’s leading energy and utility consultancy.
We’ve put together the most frequently asked questions on the Government’s new Streamlined Energy and Carbon reporting scheme, to help you meet compliance.
Got a question that we’ve not covered? Give BIU’s SECR team a call on 01253 785409 or email firstname.lastname@example.org
Streamlined Energy and Carbon Reporting (SECR) is a new, mandatory carbon and energy reporting scheme for large UK companies.
Companies within scope need to collect and measure their energy and carbon information – and submit this as part of their annual accounts filed with Companies House.
- Companies quoted on a stock exchange
- Companies that aren’t quoted, but qualify as “large”
- LLPs that qualify as “large”.
- your turnover is £36 million or over
- your balance sheet total is £18 million or over
- you have 250 employees or more
Yes, SECR applies to all quoted companies, large unquoted companies and large LLPs throughout the UK.
Companies incorporated outside of the United Kingdom are NOT required to comply with SECR, including foreign parent companies of UK subsidiaries.
- Annual greenhouse gas (GHG) emissions from activities for which your company is responsible.
- At least one intensity ratio.
- The previous year’s figures for comparison purposes (except of course in the first year of reporting).
- How you gathered data and did your calculations.
- The total energy consumption that you’ve used as the basis for your calculation of GHG emissions.
- What proportion of both energy consumption and GHG emissions is linked to the UK rather than abroad.
- What you’ve done in the past financial year to improve the energy efficiency of the business.
- UK energy use, including the electricity and gas you’ve purchased in the relevant financial year and energy use from transport.
- The GHG emissions arising from your UK energy use.
- At least one intensity ratio.
- Last year’s figures (except for the first year of reporting).
- What steps you’ve taken to improve energy efficiency in the relevant year.
- How you gathered your company’s data and worked out the totals.
BEIS’s impact assessment suggests around 25% of companies affected by the Energy Savings Opportunity Scheme (ESOS) and SECR will end up falling under both.
ESOS and SECR both require the measurement of energy consumption; once every four years under ESOS, and annually for the SECR framework.
With some smart planning you can transition easily from ESOS data reporting to SECR data reporting. Call the BiU team on 01253 785409 for advice on streamlining your reporting.
Companies in scope of SECR will be required to provide a 'narrative commentary' on energy efficiency action taken in the financial year, but, unlike ESOS, will not be required to identify further opportunities.
The required information will be backward looking as it will provide data in relation to the year of the annual report and a preceding year.
If no measures have been taken this should also be included in the report.
|Quoted companies||Large unquoted companies and LLPs|
|Annual GHG emissions from activities for which the company is responsible including combustion of fuel and operation of any facility; and the annual emissions from the purchase of electricity, heat, steam or cooling by the company for its own use||UK energy use (as a minimum gas, electricity and transport, including UK offshore area)|
|Underlying global energy use||Associated greenhouse gas emissions|
|Previous year’s figures for energy use and GHG||Previous year’s figures for energy use and GHG emissions|
|At least one intensity ratio||At least one intensity ratio|
|Energy efficiency action taken||Energy efficiency action taken|
|Methodology used||Methodology used|
Companies in scope of the SECR legislation will need to include their energy and carbon information in their Directors’ Report as part of their annual filing obligations.
Large LLPs are required to prepare an equivalent report to the Directors’ Report (called an “Energy and Carbon Report”) for each financial year.
If your organisation qualifies as a “low energy user” by consuming 40MWh or less during the relevant financial year, you are not required to provide all of the detailed information required by SECR. But you still need to make it clear to Companies House why you’re exempt, either in your Energy and Carbon Report or your Directors’ Report.
You may also apply for an exemption on the grounds that your company’s energy and carbon information is commercially sensitive, but this only applies in truly exceptional circumstances.
It is also possible to leave out certain energy and carbon information from your company’s report if it is truly impractical to obtain, but you’ll need to explain what you’re leaving out and why it isn’t possible to include it.
You are not required to report under the SECR framework at an organisational level if your organisation is defined as a public body, (note – you may still have other reporting requirements such as under the Greening Government Commitments).
However, you may fall within the scope of SECR even if undertaking public, or not for profit activities if you are a registered company or company/LLP owned by universities, academies or NHS Trusts.
Contact us if you are unsure of what your reporting requirements are.
If you’re reporting at group level, you need to include not just your own information but that of any subsidiaries which count as quoted companies, large companies or large LLPs. However, if there is information that a subsidiary would not be obliged to include if it was reporting on its own account, you are under no obligation to report it either.
If you’re reporting at subsidiary level and your energy and carbon information has already been included in the group-level report, you’re not obliged to report it in your own accounts and reports.
According to the official SECR guidance, organisations are encouraged to align all information to their financial years, “to aid comparability and consistency of information across reports and organisations.”
However, it’s not mandatory. The guidance states that: “The obligation is to disclose annual figures for emissions and energy use. If the annual period used is not the same as the financial year covered by the relevant Report, this must be made clear in the Report.”
Organisations are encouraged to use location-based grid average emission factors to report the emissions from electricity, including those consumed from the grid. Where available, time specific (e.g. hour by hour) grid average emission factors should be used in order to accurately reflect the timing of consumption and the carbon-intensity of the grid.
Where organisations have entered into contractual arrangements for renewable electricity, e.g. through Power Purchase Agreements or the separate purchase of Renewable Energy Guarantees of Origin (REGOs), or consumed renewable heat or transport certified through a Government Scheme and wish to reflect a reduced emission figure based on its purchase, this can be presented in the relevant report using a “market-based” reporting approach. It is recommended that this is presented alongside the “location based” grid-average figures and in doing so, you should also look to specify whether the renewable energy is additional, subsidised and supplied directly, including on-site generation, or through a third party. A similar “dual reporting” approach should be taken for biogas and biomethane (including “green gas”).
No. For SECR, large companies are now defined using the Companies Act definition of ‘large’ (see question 3).
This is different to the ESOS definition, which is potentially confusing for businesses. Contact us if you are unsure whether your company falls within scope of either ESOS or SECR.
No – the Streamlined Energy and Carbon Reporting framework is not linked to EU directives. It is a mandatory scheme for UK companies, to meet the requirements of new UK legislation – The Companies (Directors’ Report) and Limited Liability Partnerships (Energy and Carbon Report) Regulations 2018.
Companies incorporated outside of the United Kingdom are not required to include energy and carbon information in their Directors’ Report under this legislation, including foreign parent companies of UK subsidiaries.
No. Qualification for the CRC was assessed according to electricity use (those with half-hourly consumption over 6 GWh), whereas SECR qualification is based on company size and type. If you are a quoted company, a large unquoted company or a large LLP you will qualify for SECR. CRC did not include transport emission reporting, or the need for narrative on specific areas of improvement.
BEIS estimates some 11,900 companies will report their energy and carbon emissions under SECR, compared with about 4000 companies and 1,200 other public and private sector organisations reporting under CRC.
We asked BEIS this question and they answered: “Where there is a change of ownership, or reporting period, we advise that organisations adopt the same approach to SECR reporting as is required under the existing framework for annual accounts and reports, including the relevant smoothing provisions.”
If you’re unsure of how to report on SECR following a company change, call us on 01253 785409 or email email@example.com.
Companies complying with Streamlined Energy and Carbon Reporting must include at least one intensity ratio in their report.
An intensity ratio is a way of defining your emissions data in relation to an appropriate business metric, such as tonnes of CO2e per sales revenue, or tonnes of CO2e per total square metres of floor space. This allows comparison of energy efficiency performance over time and with other similar types of organisations.
SECR Intensity ratios are calculated by dividing your emissions by your organisation-specific metric.
The government’s environmental reporting guidelines give plenty of examples of common intensity ratios. While organisations are free to choose their own intensity ratio, these should be most appropriate to your business activity, e.g. tonnes of CO2e per total million tonnes of production for the manufacturing sector. They should also be calculated on a consistent basis year on year with the method of calculation disclosed, and meaningful to stakeholders.
Organisations in scope of SECR should report all energy use and associated GHG emissions that they are responsible for. In the case of landlord/tenant arrangements, the party responsible for the consumption of energy should take the responsibility for reporting of it.
So, as a tenant (for example in a rented serviced property) – even if you are not directly responsible for the purchase of your energy, it is your responsibility to report on it. Information on your energy consumption may be available through sub-meters, or you may need to provide estimates where information is not available.
It depends on how much financial or operational control your company has over its franchise.
A franchise is a separate legal entity usually not under the financial or operational control of the franchiser, which gives the franchise holder rights to sell a product or service.
In this case, emissions from your franchise are considered to occur at sources that you do not control: in reporting terms they are known as indirect, or Scope 3 emissions. It is voluntary to report these under SECR, but is strongly encouraged, according to the government’s official guidance.
It gets a bit more complicated if you have significant financial or operational influence over your franchises – as it could be argued that you have control over their emissions too. If you are a franchisee/franchiser looking for advice, get in touch.
In short – yes. You should report on fuel used in personal cars for business trips – this includes fuel that staff have paid for themselves and claimed as a business mileage expense.
You do not need to include emissions from staff regular commutes, that they pay for themselves, e.g. daily travel to and from the office.
As a recap, the following activities should be included in your calculation of your total energy consumption:
- Fuel used in company cars on business use.
- Fuel used in fleet vehicles which you operate on business use.
- Fuel used in personal/hire cars on business use (including fuel for which the organisation reimburses its employees following claims for business mileage).
- Fuel used in private jets, fleet aircraft, trains, ships, or drilling platforms which you operate.
- Onsite transport such as fork-lift trucks.
The following activities are NOT required to be included in your calculation of your total energy consumption but may be reported separately (including as part of Scope 3 emissions):
- Fuel associated with train travel of your employees where you do not operate the train.
- Fuel associated with flights your employees take where you do not operate the aircraft.
- Fuel associated with taxi journeys your employees take where you do not operate the taxi firm.
- Fuel associated with transportation of goods where you subcontract a firm or self-employed individual to undertake this work for you.
The Energy Advice Hub is powered by BiU, the UK’s leading energy and utility consultancy.
Got a question that we’ve not covered? Give BiU’s SECR team a call on 01253 785409 or email firstname.lastname@example.org