The Streamlined Energy and Carbon Reporting (SECR) framework, also known as the SECR, a streamlined energy carbon reporting framework for UK businesses, requires UK businesses to be transparent about their energy use and associated GHG emissions.

Launched on April 1, 2019, SECR aims to simplify previous regulations, making it easier for businesses to integrate energy efficiency and improve their energy performance in their operations. Additionally, SECR encourages companies to improve energy efficiency by evaluating their energy consumption and implementing initiatives to enhance their energy efficiency.

This article explains SECR in detail, including its purpose, the types of businesses that must comply, and the reporting requirements. It will help you understand how to meet these new regulatory demands.

Key Takeaways

SECR, introduced in 2019, mandates annual energy usage and greenhouse gas emissions reporting for applicable UK businesses, emphasising transparency and energy efficiency.

Businesses must comply with specific reporting requirements, including disclosing energy sources, energy and carbon information, and at least one annual emissions and intensity metric, with exemptions for low energy users consuming 40 MWh or less annually. Effective energy management is crucial for meeting these requirements through disclosing energy sources and initiatives to improve energy efficiency.

Compliance with SECR offers operational cost savings, enhanced transparency, and improved competitiveness. It also encourages voluntary disclosures and external verification for greater credibility.

Understanding Streamlined Energy and Carbon Reporting

The UK's Streamlined Energy and Carbon Reporting (SECR) framework ensures companies comply and increases transparency and responsibility regarding greenhouse gas emissions and energy consumption. The reporting period refers to the timeframe companies must assess carbon reports and disclose their energy use and greenhouse gas emissions.

Established on April 1, 2019, SECR evolved from previous regulations like the Mandatory Greenhouse Gas Reporting regulations and the Carbon Reduction Commitment, aiming to accelerate progress toward a low-carbon economy. This framework is part of the UK's broader strategy to address climate change, encouraging businesses to adopt more sustainable practices and integrate energy efficiency into their core operations. 

SECR helps improve energy efficiency by requiring businesses to evaluate their energy consumption and disclose their energy efficiency measures alongside their associated greenhouse gas emissions. By fostering a culture of transparency, SECR not only aids in regulatory compliance but also empowers businesses to identify opportunities for reducing energy consumption and associated emissions, ultimately contributing to the transition to a more sustainable, low-carbon economy.

The SECR initiative is not merely focused on regulatory compliance but is structured to integrate energy efficiency into businesses' fundamental strategies. The framework supports entities in fulfilling statutory obligations and gaining competitive advantages by implementing robust carbon reporting processes and measures that enhance energy efficiency. 

Through SECR, companies are encouraged to adopt innovative technologies and practices that drive their energy efficiency actions, which can lead to significant cost savings and improved operational performance. By aligning energy efficiency action and carbon reporting with financial disclosures, SECR ensures that businesses are held accountable for their environmental impact, fostering a more sustainable business environment.

The SECR framework is integral to the UK's broader strategy to address climate change and drive the transition to a low-carbon economy. SECR encourages companies to proactively manage their energy consumption and associated greenhouse gas emissions by mandating energy and carbon reporting transparency. This initiative helps meet regulatory requirements and benefits businesses from economic and environmental advantages. 

Companies implementing SECR effectively can enjoy enhanced stakeholder trust, improved brand reputation, and increased market competitiveness. Furthermore, SECR compliance can open up new opportunities for businesses to engage in voluntary carbon reporting initiatives, showcasing their commitment to sustainability and corporate social responsibility.

The purpose of SECR

The objective of SECR is to improve energy efficiency and carbon reporting, promote the implementation of measures for energy efficiency, reduce carbon emissions, take energy efficiency action and ensure consistency with financial disclosures related to the climate.

By establishing standardised reporting practices, SECR guarantees that organisations can produce comparable annual emissions reports and offer a complete perspective on their performance. Such clear-cut visibility enhances emissions management and aligns with broader UK energy initiatives, encouraging higher accountability and advancements in the overall energy efficiency scheme.

Expanding on this, SECR plays a pivotal role in aligning corporate strategies with environmental responsibilities. By integrating energy efficiency measures into business operations, companies can significantly reduce their carbon footprint, leading to a more sustainable future. 

This framework mandates transparency in energy consumption and greenhouse gas emissions and encourages companies to innovate and adopt new technologies that enhance energy efficiency. By doing so, businesses can achieve substantial operational cost savings and improve their competitiveness in the global energy market.

Moreover, SECR's emphasis on consistency with financial disclosures ensures that energy and carbon reporting are not isolated from a company's financial health. This integration with the financial reporting council also allows stakeholders to holistically understand an organisation's environmental impact and economic performance, fostering trust and accountability.

As businesses strive to meet SECR requirements, they contribute to the UK's broader goals of reducing greenhouse gas emissions and transitioning to a low-carbon economy.
Incorporating SECR compliance into a company's strategic planning can lead to numerous benefits, including enhanced brand reputation, increased stakeholder confidence, and access to new markets prioritising sustainability. 

By proactively managing their energy consumption and emissions, companies can position themselves as leaders in environmental stewardship, setting a benchmark for others. SECR catalyses positive change, driving businesses towards a more sustainable and prosperous future.

Who must comply with SECR?

Determining the entities required to adhere to SECR is essential. The mandate extends to quoted companies and encompasses large unquoted companies, sizeable limited liability partnerships, and Limited Liability Partnerships (LLPs).

To be obligated to carbon and report energy used under SECR, entities must satisfy at least two of the following thresholds: possessing an annual turnover exceeding £36 million, having a balance sheet total greater than £18 million, or employing a workforce of 250 or more individuals. These criteria are set so that organisations with substantial energy consumption are responsible for their environmental footprint.

Large limited liability partnerships and other large organisations must adhere to specific reporting requirements related to greenhouse gas emissions, energy usage, and efficiency initiatives as part of their annual filing obligations. 

To fulfil their obligations under this framework, all unquoted companies and LLPs must prepare and submit an energy and corporate report separately from the Companies House. If the energy usage of large unquoted companies and LLPs does not exceed 40 MWh, they are exempt from reporting. By doing so, smaller-scale energy consumers face less regulatory pressure.

Furthermore, SECR compliance is a matter of meeting regulatory requirements and an opportunity for businesses to enhance their sustainability practices. Organisations can better align their strategic goals with environmental responsibility by understanding which entities must comply. This alignment can lead to improved energy management, reduced greenhouse gas emissions, and a stronger market position.

Moreover, companies that meet the SECR criteria are encouraged to explore innovative energy efficiency technologies and practices that can lead to significant operational cost savings and improved competitiveness. This proactive approach helps fulfil compliance obligations and contributes to the broader goals of reducing carbon emissions and transitioning to a low-carbon economy.

Additionally, SECR's framework provides a platform for businesses to engage with stakeholders through transparent reporting of energy consumption and emissions data. This transparency fosters trust and accountability, enhancing the company's reputation and stakeholder confidence.

By actively participating in SECR, businesses can position themselves as leaders in environmental stewardship, setting a benchmark for others to follow in the journey towards sustainability. Complying with SECR also allows companies to improve energy efficiency, which is crucial for cost savings and environmental impact.

Reporting requirements under SECR

Under the Streamlined Energy and Carbon Reporting (SECR) framework, companies must disclose their UK energy use and greenhouse gas emissions annually. This disclosure should encompass the energy consumed from various sources, such as electricity, gas, and transport fuels, and the corresponding energy use, GHG, and emissions equivalent to the energy used. Businesses must provide at least one measure of emission intensity to offer stakeholders a definitive assessment of their environmental impact.

These disclosures must include precise energy use data to ensure that SECR information is accessible and understandable for stakeholders. This enables them to hold organisations accountable effectively while accurately assessing a company's green credentials.

Expanding on this requirement, companies are encouraged to integrate energy efficiency measures into their operations, which can significantly reduce their carbon footprint. These measures help improve energy efficiency, aligning with mandatory energy reporting in frameworks like ESOS and SECR. By doing so, businesses can comply with SECR regulations and achieve substantial cost savings and operational improvements.

The framework allows for incorporating innovative technologies and practices that enhance energy efficiency, providing a competitive edge in the market.

Moreover, SECR reporting is aligned with broader financial disclosures, ensuring that energy and carbon reporting are not isolated from a company's financial health. This alignment offers stakeholders a comprehensive view of an organisation's environmental impact, fostering trust and accountability. By meeting SECR requirements, companies contribute to the UK's goals of reducing greenhouse gas emissions and transitioning to a low-carbon economy.

Furthermore, businesses that go beyond SECR's basic requirements by engaging in voluntary carbon disclosures can further enhance their reputation and stakeholder confidence. Such initiatives demonstrate a company's commitment to sustainability and corporate social responsibility, positioning it as a leader in environmental stewardship. Ultimately, SECR catalyses positive change, encouraging businesses to adopt sustainable practices that yield economic and environmental benefits.

Quoted Companies

Beginning with the financial year 2019 and years that initiate on or after April 1, companies listed on the stock exchange must report their worldwide energy consumption, underlying and annual global emissions, energy use, and GHG (Greenhouse Gas) emissions within their yearly Directors' Report.

They must provide a detailed account of Scope 1 and Scope 2 GHG emissions expressed in metric tons of CO2 equivalent while also including energy consumption metrics and comparing them with data from the prior year.

Large Unquoted Companies and LLPs

Large unquoted companies, huge companies, and limited liability partnerships must disclose their energy consumption within the UK, including electricity, gas, and transport fuel usage. They are also obliged to report associated energy use and GHG+ emissions along with at least one metric conveying the intensity of their energy use.

Voluntary Disclosures

Companies must make certain disclosures under SECR, but they can boost stakeholder confidence and credibility through additional voluntary carbon disclosures.

Such an extended, voluntary reporting period of carbon emissions goes a long way in reinforcing the company's dedication to sustainable practices. This carbon report also includes initiatives to improve energy efficiency, demonstrating the company's commitment to reducing its environmental impact. By voluntarily disclosing more comprehensive emissions data, companies can showcase their proactive approach to climate change and dedication to corporate social responsibility.

Furthermore, voluntary carbon disclosures can give businesses a competitive edge by highlighting their leadership in sustainability initiatives. This transparency can attract environmentally conscious investors and customers who prioritise sustainability in their decision-making processes. Companies that engage in a voluntary carbon reporting framework can differentiate themselves from competitors by demonstrating a forward-thinking approach to environmental stewardship.

Voluntary disclosures allow companies to align their sustainability goals with global frameworks and standards, such as the Task Force on Climate-related Financial Disclosures (TCFD) and the GHG Reporting Protocol. By doing so, businesses can ensure that their reporting practices align with international best practices and gain recognition as leaders in climate-related financial disclosures.

Moreover, engaging in voluntary carbon disclosures can enhance a company's reputation and build trust with stakeholders, including employees, customers, investors, and regulatory bodies. This trust can translate into stronger relationships and increased brand loyalty, ultimately contributing to long-term business success.

In conclusion, while SECR mandates specific reporting requirements, companies that go beyond these obligations by engaging in voluntary carbon disclosures can reap significant benefits. Businesses can strengthen stakeholder confidence, enhance competitiveness, and contribute to a more sustainable future by demonstrating their commitment to sustainability and transparency.

Scope 3 Emissions: Why They Matter

Although disclosing Scope 3 emissions is not mandatory, it is strongly advised since they typically constitute the bulk of a company's overall carbon footprint. Up to 90% of an organisation's greenhouse gas output can stem from indirect sources such as supply chains and additional external operations.

External Verification and Best Practices

Adopting external verification measures can significantly improve the reliability and accuracy of carbon reporting. Third parties' involvement in verifying reported data ensures its dependability, building more confidence among stakeholders.

Advantages of third-party validation

Adhering to the Streamlined Energy and Carbon Reporting (SECR) framework for offshore energy brings many advantages that surpass simply following regulations. One of the forefront is the reduction in operational costs for energy users.

SECR also helps businesses improve energy efficiency by evaluating their energy consumption and implementing necessary initiatives to increase energy efficiency.

By using an energy efficiency scheme pinpointing areas where a company's energy consumption can be conserved through energy management systems, companies can slash their energy bills significantly, leading to notable economic gains. Adherence to SECR cultivates an atmosphere of openness and responsibility, which bolsters both corporate reputation and stakeholder confidence underlying global energy,

Operational Cost Savings

Businesses can achieve substantial cost savings in operations by adopting energy efficiency strategies to improve energy efficiency via the Streamlined Energy and Carbon Reporting (SECR) framework. SECR provides a pathway for companies to establish energy management systems, perform energy audits, and identify opportunities to decrease energy expenditures.

This proactive method assists with regulatory compliance and financial reporting council and directly improves profitability by minimising excessive energy consumption.

Enhanced Transparency

SECR fosters greater transparency in reporting energy use and carbon emissions, holding organisations accountable for their environmental impact.

This transparency ensures that companies adopt effective energy efficiency measures to improve energy efficiency and provides stakeholders with a clear understanding of their environmental performance, including energy performance data.

Innovation and Competitiveness

SECR prompts companies to create inventive approaches to improving energy efficiency, minimising energy consumption, and managing emissions. By participating in SECR, businesses are inspired to embrace cutting-edge technologies, energy efficiency technologies, and innovative practices that substantially reduce energy use and carbon emissions.

Reporting process: how to comply with SECR

The procedure for SECR reporting mandates meticulous adherence to specific measures guaranteeing conformity and precision. To improve energy efficiency, businesses must evaluate their energy consumption and implement initiatives to enhance their energy performance. Enterprises must diligently compile and supervise data pertinent to their energy consumption and greenhouse gas emissions output, known as energy data management.

Data Collection and Calculation

Energy monitoring is essential to improve energy efficiency and gather precise data for the success of Streamlined Energy and Carbon Reporting (SECR). To this end, firms need to collect consumption information from sources such as invoices, meter readings, and yearly statements provided by suppliers.

Tools like Ecometrica can help streamline this process by ensuring that sustainability reporting meets SECR standards while enabling efficient data collection and analysis.

Annual Reports and Directors' Report

Information about SECR must be integrated into the Directors' Report or an equivalent report as part of the energy reporting framework to facilitate stakeholder access. Companies may include this information in their strategic reports if relevant to their overarching strategy. They are obligated to justify such a decision in the Directors' Report.

Exemptions and Special Cases

Under the Streamlined Energy and Carbon Reporting (SECR) framework, specific enterprises are not required to comply in certain situations, thus lightening their regulatory load. However, these frameworks also encourage businesses to improve energy efficiency by evaluating their energy consumption and implementing initiatives to enhance it.

Low Energy Users

Businesses consuming 40 MWh or less of energy in a financial year qualify as low-energy users and are exempt from SECR reporting. These low-energy users must include an energy usage declaration in their annual reports, confirming their energy usage to ensure transparency and accountability. Additionally, energy users should consider initiatives to improve energy efficiency as part of their commitment to sustainability.

Group-Level Reporting

Under the Streamlined Energy and Carbon Reporting (SECR) framework, group reporting mandates that a parent company and its subsidiaries disclose information about underlying global energy use and carbon emissions. These frameworks encourage organisations to improve energy efficiency by evaluating energy consumption and implementing initiatives to enhance energy efficiency. Incorporating these details underlying global energy use within the group's report may negate the need for individual subsidiary disclosures.

Next Steps for SECR Compliance

Businesses aiming to comply with SECR should begin by accurately defining their organisational boundaries, covering all necessary components for reporting to improve energy efficiency. The process demands a systematic strategy for data gathering, energy use and associated GHG emissions calculation, and the preparation of thorough reports.

Identifying Reporting Boundaries

Establishing well-defined organisational limits is crucial for companies to ensure precise reporting under the SECR framework. This involves considering their group structure, any subsidiaries they have, and involvement in joint ventures while delineating these borders.

Implementing Energy Efficiency Actions

Improve energy efficiency through regular energy audits. These audits are instrumental in pinpointing opportunities for enhancing energy efficiency and aiding adherence to SECR regulations. Adopting energy management systems facilitates these improvements and boosts overall energy efficiency.

Tools and Resources

SECR equips enterprises with various instruments and supports to enhance energy efficiency and reduce carbon emissions. These tools help businesses improve energy efficiency by evaluating their energy consumption and implementing initiatives to strengthen it. This entails advice on creating systems for managing energy use, assessing offshore energy use, and pinpointing possibilities for cost savings.

Carbon Management Platforms

Platforms for energy and carbon information management are essential in aiding companies in complying with Streamlined Energy and Carbon Reporting (SECR) by supporting all necessary data points to improve energy efficiency. These energy data platforms offer valuable insights into minimising environmental impacts and assist businesses in efficiently managing their energy use and carbon information together, thus enabling them to craft strategies for emission reduction.

Government and Industry Guidelines

Consulting the guidelines provided by government bodies and industry entities is crucial for comprehension and adherence to SECR mandates. These guidelines often emphasise improving energy efficiency as part of mandatory reporting frameworks like ESOS and SECR. The taxonomy introduced in 2019 specifically aims to promote better visibility and easy retrieval of data related to SECR through effective tagging mechanisms.

Implementing Energy Efficiency Actions

The Streamlined Energy and Carbon Reporting (SECR) initiative is a regulatory scheme that compels compliance while offering avenues to improve energy efficiency, operational enhancement, and business reputation. By grasping SECR's intent and stipulations, companies can incorporate energy efficiency initiatives effectively and elevate their environmental credentials.

Adhering to SECR offers advantages ranging from financial savings to bolstered transparency and spurred innovation, rendering it an indispensable instrument for businesses.

As organisations progress toward complying with SECR, utilising existing instruments and best practice recommendations will guarantee precise and trustworthy carbon reporting. Embracing these practices meets legal demands and distinguishes firms as frontrunners in sustainable operations, promoting fiscal gains and ecological stewardship.

United in our efforts towards sustainability, let us advance with commitment by engaging in rigorous energy efficiency measures and comprehensive energy and carbon reporting processes that yield significant economic and environmental benefits.

Why Choose Focus Green for Your Streamlined Energy and Carbon Reporting (SECR)

Partnering with Focus Green for your SECR compliance ensures your business achieves maximum efficiency, accuracy, and transparency in energy and carbon reporting. Here's why Focus Green is the trusted choice for Streamlined Energy and Carbon Reporting (SECR):

Expertise in SECR Compliance

With years of experience in energy management and carbon reporting, Focus Green understands the complexities of SECR regulations. Our expert team will guide your business through every step of the process, ensuring full compliance with all mandatory reporting requirements.

Tailored Energy Solutions

Focus Green offers bespoke energy efficiency solutions that align with your company's unique needs. We go beyond compliance by helping you identify energy-saving opportunities, reduce costs, and implement initiatives that enhance your operational efficiency.

Advanced Reporting Tools

We use cutting-edge carbon management platforms and data analytics tools to streamline the collection, calculation, and reporting of energy use and greenhouse gas emissions. This ensures your reports are accurate, comprehensive, and aligned with industry best practices.

Sustainable Business Strategies

Our services extend beyond reporting. Focus Green empowers businesses to integrate sustainability into their core strategies, helping them achieve long-term environmental and economic goals. We provide end-to-end solutions, from identifying carbon reduction opportunities to implementing innovative energy technologies.

Enhanced Stakeholder Confidence

Transparency and accountability are central to SECR compliance, and Focus Green ensures your reporting meets legal standards and builds stakeholder trust. You strengthen your reputation and market position by showcasing your commitment to sustainability and energy efficiency.

End-to-End Support

Focus Green's dedicated team manages the entire SECR process, from data gathering and calculations to submitting accurate reports to the relevant authorities. This comprehensive approach allows you to focus on your business while we handle the complexities of compliance.

Choosing Focus Green means aligning your business with a trusted partner who will help you navigate SECR requirements effectively while unlocking the financial, operational, and reputational benefits of energy efficiency and sustainable practices. Let us help you take the next step toward a greener, more competitive future.

Certified and Continually Evolving Expertise

Our team of energy consultants and assessors is certified by leading accreditation bodies and undergoes regular training to stay ahead of industry standards. This ensures you'll always benefit from cutting-edge knowledge and proven expertise when working with us.

Personalised Service with Dedicated Project Managers

At Focus Green, every client is paired with a Dedicated Project Manager. This means you'll always have a reliable, knowledgeable point of contact who understands your unique needs and guides you through every step of the SECR process.

A Network of Over 200 Experts Nationwide

We work with a trusted network of more than 200 professional energy consultants and assessors across the UK. Whether you need support in London, Edinburgh, or anywhere in between, we can connect you with the right expert to assess your energy needs and provide tailored recommendations.

Tailored Solutions for Energy and Carbon Success

Our approach is far from one-size-fits-all. We specialise in crafting personalised energy reports, carbon reduction strategies, and management plans to identify cost-saving opportunities while advancing environmental sustainability. By working with Focus Green, your business will lead the way in the transition to a greener, more efficient future.

Take the First Step Today

Ready to unlock the benefits of energy efficiency and sustainability while meeting your SECR obligations? Join the growing number of businesses that trust Focus Green to drive meaningful results through more intelligent energy use and streamlined carbon reporting. Together, we can shape a more sustainable, cost-effective future.

Contact Focus Green today and let our expert team guide you. Call us on 0330 320 3494.