Streamlined Energy and Carbon Reporting ( SECR )

SECR is a legal obligation for all large organisations to disclose their energy and carbon emissions within their annual Director’s Report, or separate sustainability report.  Large companies and Limited Liability Partnerships (LLPs) under SECR are defined as meeting at least two of the following three criteria:

• Turnover exceeding £36m;
• Balance sheet exceeding £18m;
• 250 or more employees

Likewise, cited companies of any size, listed on a major stock exchange and incorporated in the United Kingdom must also report.

SMEs are encouraged to participate in SECR, as it represents best practice in environmental disclosures and helps to identify opportunities to reduce environmental impact and save money.

What do companies have to report?

Unquoted Large Companies and LLPs

• UK energy consumption
• UK Scope 1 emissions (directly combustible fuels)
• UK Scope 2 emissions (purchased electricity, heat and steam) emissions.
• UK Scope 3 emissions (rental vehicles, business mileage claims)
• Emissions must be reported in tonnes of carbon dioxide equivalent (CO₂e), which includes all seven major greenhouse gases.
• Comparison with at least the previous reporting, but on-going long-term analysis encouraged
• An ‘environmental narrative’ which states what the company has done during the last 12 months to reduce energy and carbon

Scope 3 emissions only cover business travel where the company is supplied with fuel but not where fuel is paid for indirectly. For example, fuel is consumed in personal vehicles and hire cars (and reimbursed by the company either exactly or at a set rate) but fuel associated business flights, trains or taxis are excluded, as the vehicles are not operated by the company or its employees.

However, companies are encouraged to report other materials source of Scope 3 emissions relevant to their business. These may include other forms of business travel, materials, waste, employee commuting, homeworking, transport of goods etc.

Whilst not mandatory, external verification or assurance is recommended to ensure accuracy, completeness of reporting.

Quoted Companies

• Global energy consumption
• Global Scope 1 emissions (directly combustible fuels, natural gas, petrol, diesel, oil etc.)
• Global Scope 2 emissions (purchased electricity, heat and steam)
• Emissions must be reported in tonnes of carbon dioxide equivalent (CO₂e), which includes all seven major greenhouse gases.
• Emissions for UK and overseas must be reported separately
• At least one key performance indicator to show the link between carbon emissions and business performance
• Comparison with at least the previous reporting, but on-going long-term analysis encouraged
• An ‘environmental narrative’ which demonstrates what the company has done during the last 12 months to reduce energy use and carbon

Scope 3 emissions are voluntary for quoted companies. However, it is becomingly increasingly expected that companies account for and tackle emissions with their supply chains.