SECR: Everything Your Business Needs to Know

As you’re probably aware, the UK Government wants us all to meet Net Zero targets by 2050.

This may seem like a long way away, but there’s a lot of work to do.

One way businesses are helping to reach this goal is through SECR reporting.

If you’ve not heard of SECR reporting before, or have to file a report but aren’t sure where to begin, we’ve put together this comprehensive guide to answer your questions.

What is SECR?

SECR (Streamlined Energy and Carbon Reporting) is a mandatory UK framework that requires qualifying companies to report on their energy use and greenhouse gas emissions annually.

Who Needs to Comply With SECR?

You must report on SECR if you’re a UK-registered business and one of the following applies:

1. You’re a ‘quoted company’ publicly trading on a stock exchange (not necessarily the London Stock Exchange)
2. You’re a ‘large’ company or limited liability partnership (LLP). This means you meet two of the following criteria in a financial year:
   • You have a turnover exceeding £36 million
   • You have gross assets over £18 million
   • You have more than 250 employees

If you’re a large company or LLP, you are exempt if you are a ‘low energy user’ (i.e. you use less than 40,000 kWh of energy in a financial year).

If this applies to you, you will need to provide evidence of your energy use.

Does SECR Apply to Charities and Public Bodies?

If you’re a charity and you meet the criteria, you need to report your carbon emissions under SECR.

Public bodies are typically excluded from SECR, but they may have other reporting requirements. For example, UK government departments and agencies must report under the Greening Government Commitments.

If you’re not sure what you need to report on or if you’re eligible, get in touch and we can check for you.

Can Other Businesses Take Part?

At this moment in time, SMEs don’t have to file a SECR report, but there’s nothing to stop you from compiling your own carbon emissions report.

Bear in mind that if you’re classified as a small or medium-sized business, you may still need to report on your carbon emissions to support large companies in your supply chain.

How Does SECR Work With Parent Companies and Subsidiaries?

If a subsidiary meets the criteria for SECR reporting, it should be included in the parent company’s report.

If it doesn’t meet the criteria, the subsidiary’s information doesn’t have to be included.

Qualifying subsidiaries do not need to submit a report if they are covered by a parent company’s SECR report.

What Do You Need to Report on for SECR?

All eligible companies must:

• Report their Scope 1 (emissions that come directly from a business) and Scope 2 (emissions generated from the energy a business uses) greenhouse gas emissions. Quoted companies must report on their global emissions, while large unquoted companies and LLPs only need to report on UK energy use
• Provide an intensity ratio. This compares a company’s greenhouse gas emissions to an appropriate business metric for comparative purposes. For example, tonnes of CO2 per square metre of floor space or revenue
• Provide the previous year’s figures for comparative purposes
• Report on what they have done to reduce carbon emissions
• Advise on the reporting methodology they have used

Are Estimates Acceptable?

Yes – if you can’t get exact figures, you can provide an estimation.

What Happens if You Can’t Collect Specific Information?

SECR has a ‘comply or explain’ clause.

This means you can exclude information where it’s not feasible or practical to collect it, or the information is commercially sensitive.

However, you need to explain why the information has been omitted and outline the steps you will take to collect it in the future.

What is the Reporting Period for SECR?

SECR covers a 12-month period.

The Government recommends that your SECR reporting period ties in with your financial reporting period for ease of reading, but it doesn’t have to – just make this clear in your reporting.

How Do You File Your SECR Report?

You file your SECR report as part of your annual directors’ report when you file your annual accounts with Companies House.

Does SECR Information Have to Be Included on Your Website?

No – you don’t have to upload your SECR report to your website.

However be aware that as your SECR report is filed with Companies House, it will be available publicly.

Is There Any Reporting That’s Voluntary?

Yes. You don’t have to report Scope 3 Emissions under SECR, but it’s recommended, especially for quoted companies.

Scope 3 Emissions cover all the indirect carbon emissions your business is responsible for, including employee commuting, capital goods, and purchased goods and services.

While Scope 3 reporting is voluntary, it can give you a good indication of how your suppliers, clients, and customers contribute to your carbon footprint.

What Are the Penalties for Not Filing a SECR Report?

A late or incomplete report may attract financial penalties. This penalty can vary depending on the company type and how severe the issue is.

In an extreme situation, a company may be publicly censured, leading to negative publicity.

What’s the Difference Between SECR and ESOS?

Both SECR and ESOS (Energy Savings Opportunity Scheme) require businesses to report on their environmental impact, but they have different goals.

SECR measures businesses’ carbon emissions, while ESOS measures energy consumption in general.

The criteria for ESOS and SECR are also different – companies must have an annual turnover of £44 million to take part in ESOS. This means some companies may have to carry out SECR reporting but not ESOS reporting.

(Although the ESOS criteria will be lowered to align with SECR in the future.)

How Can Businesses Make Reporting SECR as Easy as Possible?

SECR reporting can feel like an additional burden, especially if you have a million other things to do!

Here’s how you can compile your SECR report as quickly and efficiently as possible:

• Check your obligations. Are you legally required to submit a SECR report and if so, do you need to submit information on behalf of your subsidiaries? We can help you double-check if you’re not sure
• Nominate someone within your business to take responsibility for SECR and ensure the relevant departments know which information they need to gather
• Use energy monitoring software to get the data you need. Our energy platform comes free of charge when you procure your gas or electricity with us
• Look at other reports for inspiration. As SECR reports are filed with Companies House, they are publicly available to view
• Don’t panic if you can’t get all the information you need the first time around. You can provide estimates and omit data if you have a legitimate reason. However, don’t become overly reliant on this as an approach, as you may be questioned about it

SECR? Sorted with Tritility.

SECR reporting doesn’t have to be frustrating. Once you’ve got your first report out of the way, it gets easier.

Plus, you get valuable insight into the size of your carbon footprint and how you can become more sustainable.

If you’re not sure where to start, we’re here to help. Our experienced team will check whether you need to file a report, show you how to get started, and walk you through the process.

Get in touch – we’d be happy to answer all of your questions.