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Are you ready for Streamlined Energy and Carbon Reporting (SECR)?

How is energy and carbon reporting changing and what do large companies need to know about SECR?

On 1 April 2019 a major shake-up in energy and carbon reporting will take place. From this date Streamlined Energy and Carbon Reporting (SECR) will replace the CRC Energy Efficiency Scheme. The new SECR framework will also replace and extend Mandatory Greenhouse Gas Emissions reporting (MGHG) for quoted companies.

In making these changes, the UK government aims to simplify carbon reporting requirements, while ensuring that businesses have the right information to reduce their emissions and energy costs.

What is SECR?

SECR applies to quoted companies, large unquoted companies and large limited liability partnerships (LLPs). Eligible companies are required to disclose their annual greenhouse gas emissions and energy consumption.. They must also report on energy efficiency actions completed during each compliance year. Businesses must publish this information as part of their annual financial filing obligations.

SECR will not replace existing Energy Saving Opportunities Scheme (ESOS) reporting, which remains unchanged.

What are the key changes?

  • More companies will be required to report than under the CRC Energy Efficiency Scheme.
  • Although SECR replaces MGHG, the same reporting requirements will continue under SECR, but quoted companies will also need to report their total global energy use.
  • All reporting businesses are required to provide commentary on what energy efficiency action they have taken in the previous financial year.
  • The government has not specified any methodologies to use for the carbon reporting; however, it’s most recent guidance on carbon reporting contains advice on good practice.

What are the reporting requirements?

Streamlined Energy and Carbon Reporting diagram

Who is Exempt from SECR?

  • Companies that can demonstrate that their energy usage is very low: less than 40,000kWh over a 12-month period.
  • UK subsidiaries do not need to report separately if they are covered by their parent company’s group report, although they can report voluntarily.
  • If it is impractical for a company to obtain some or all of its global energy use data then this does not need to be reported on, so long as the company explains and justifies what has been excluded.
  • In certain exceptional cases, where publicly reporting on energy use could be deemed as commercially sensitive and prejudicial to a company’s interests, this is justification for an exemption.

Where should companies report?

  • In their Director’s report as part of their annual filing obligations; however in some cases, information may be published in the strategic report.
  • LLPs can prepare an Energy and Carbon Report, which must be approved and signed off by LLP members.
  • Charitable companies can report via their Combined Directors' and Trustees' Report.

When do relevant businesses need to report by?

The earliest SECR reporting date will be 1 April 2020, but this is dependent on how a company's financial year runs, e.g:

SECR reporting deadlines

Is there a cost implication to SECR?

In contrast to the CRC scheme, there is no taxation impact on businesses. However, this 'lost' tax revenue from the abolition of CRC will be offset by increased Climate Change Levy (CCL) rates, which will increase substantially from 1 April 2019.  

How Centrica Business Solutions can help

It is essential that businesses monitor and analyse their energy consumption and emissions performance using advanced energy insight strategies and technologies. In this way they can simplify data capture and reporting processes. 

We can help businesses with both ESOS and SECR reporting – supporting the entire compliance process and exploiting opportunities to reduce energy costs and improve energy sustainability.

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