Carbon Reporting: The Streamlined Energy and Carbon Reporting Framework

With the end of the financial year fast approaching, businesses are once again turning their attention to the Streamlined Energy and Carbon Reporting (SECR) Framework. Vice President of I&C Supply, Louise Wapshare looks at the requirement and considers what businesses need to do to comply.

Following a decision to scrap the Carbon Reduction Commitment in 2016, the UK Government decided to implement a more streamlined framework (SECR).

Which businesses are affected?

All UK quoted companies listed on the main market of the London Stock Exchange; a European Economic Area Market; or whose shares are dealing on either the New York Stock Exchange or the NASDAQ are affected.

It also affects large UK incorporated unquoted companies and large limited liability partnerships which match at least two of the following criteria within a financial year:

  • At least 250 employees 
  • An annual turnover greater than £36m
  • An annual balance sheet total greater than £18m

Any businesses which match the eligibility criteria, but consume less than 40,000kWh in a 12-month period, will be exempt from the reporting requirements. In addition, subsidiary undertakings which meet the eligibility criteria in their own right, will not be required to report individually if they are covered by a parent company’s group report.

What do I need to report?

UK unquoted companies need to, where practical, report:

  • Scope 1 & 2 Greenhouse Gas Emissions (GHG)
  • An intensity ratio
  • Methodologies used in the calculation of disclosures
  • The previous year’s figures for energy use and GHG emissions
  • UK energy use (electricity, gas and transport as a minimum).

Some large businesses are already measuring their energy use under the Energy Savings Opportunity Scheme (ESOS), so this data may be readily available.

Quoted companies will also need to report their global energy use and emissions, alongside what proportion of these factors apply to the UK.

SECR participants will also need to provide a narrative commentary on energy efficiency actions taken in the appropriate financial year. They may disclose ESOS recommendations and how those have been taken forwards in order to comply with this. However, they are not mandated to do so.

How does my business ensure it adheres to the reporting requirements?

The mandatory requirements must be covered in the Director’s Report, or within an Annual Report for the appropriate financial year. The first report must apply to financial years beginning on or after 1st April 2019. It will therefore need to be submitted to companies’ house in 2020.

Reporting can be either electronic or paper-based.

View the full guidance on how to report under the SECR

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