UK Government announces new mandatory Streamlined Energy and Carbon Reporting (SECR) framework for all large UK businesses

The UK Government has announced its plans for the new Streamlined Energy and Carbon Reporting (SECR) regulations to take effect in 2019.

The new mandatory reporting framework will replace the CRC Energy Efficiency Scheme (CRC EES) and extend the scope of the existing Mandatory Carbon Reporting (MCR) regulations for listed companies to all large organisations. You can find the government’s full response on their website.

The SECR is designed to streamline and reduce complexity in the carbon and energy reporting landscape as well as broaden the scope for reporting compliance. This will mean almost a seven-fold increase in the number of companies required to comply with energy and carbon reporting legislation.

SECR Highlights

All large* quoted and unquoted companies, as defined by the Companies Act 2006, will have to comply with the new energy and carbon reporting framework from April 2019. To reduce the additional burden on reporting companies it is expected that the figures will be published in Annual Reports, alongside financial data.

Companies using 40,000 kWh or less of energy in the 12-month reporting period will be exempt, as will those unquoted companies where ‘it is not practical to obtain information’.

For greenhouse gas emissions, Scopes 1 and 2 will be required with Scope 3 reporting remaining voluntary. For the GHG calculations, details of the methodology and a suitable carbon intensity metric is also needed.

Energy in the scope of the new SECR legislation includes all UK electricity, gas, and transport (road, rail, air and shipping) energy use.

*Large companies are those where two or more of the following criteria hold true for the reporting period:

·         More than 250 employees

·         An annual turnover greater than £36m

·         An annual balance sheet greater than £18m

What does this mean for me?

The impacts of the new legislation will vary depending on your current situation.

If you are already reporting under Mandatory Carbon Reporting, there is little change except for the addition of the inclusion of energy use and energy efficiency measures.

If you are reporting and purchasing credits in the CRC EES, then the new SECR regulations will replace these (with much of the direct costs of CRC shifted to the Climate Change Levy)

The largest change will come for those organisations who don’t fall into either scheme.  It’s likely that most organisations who have had to submit a return for the Energy Saving Opportunities Scheme (ESOS) will be required to report to the new scheme. This will introduce annual public disclosure of UK energy use and carbon emissions to possibly in excess of 10,000 organisations, up from approximately 1,600 required to report for MCR.

The new regulations will present a challenge to many businesses and an opportunity for some larger global businesses not currently reporting to consider applying best practice.

As experts in greenhouse gas and sustainability reporting, Ecometrica can work with you to minimise the reporting burden. You can see what we do to help companies reporting to CDP, or if you’d like to chat more, get in touch and we’ll contact you to arrange a demonstration of the Ecometrica Platform.