A Complete Guide to SECR: Ace Your Compliance

In the ever-evolving landscape of environmental regulation, UK businesses face a critical requirement: compliance with the Streamlined Energy and Carbon Reporting (SECR) framework.

Initiated in April 2019, SECR aims to enhance the understanding of energy efficiency and reduce carbon emissions among UK companies. For a comprehensive overview of SECR, detailing who is affected, what is required, and how businesses can not only comply but excel in their reporting, continue reading the article below.

What Is SECR?

Streamlined Energy and Carbon Reporting (SECR) is a UK government initiative designed to simplify carbon and energy reporting, encouraging improved efficiency and reduced carbon footprints among businesses. It builds on previous legislation like the Mandatory Greenhouse Gas Reporting and the Carbon Reduction Commitment (CRC) Energy Efficiency Scheme, which it effectively replaced.

SECR extends the reporting requirements to a broader scope of companies, with the aim of fostering transparency and informing corporate decisions on energy use and carbon emissions.

Who Needs to Comply?

SECR compliance is mandatory for large UK incorporated companies that meet at least two of the following criteria in a financial year:

• More than 250 employees
• Annual turnover greater than £36 million
• An annual balance sheet total over £18 million

Quoted companies, large unquoted companies, and large Limited Liability Partnerships (LLPs) are also required to comply. Special provisions apply to public sector organisations and not-for-profit entities, which may be exempt unless they engage in commercial activities.

What Are the Reporting Requirements?

The requirements of SECR can be divided into specific categories based on the type of business:

Quoted Companies

• Report on their UK and global energy use and associated greenhouse gas emissions.
• Include emissions from purchased electricity, heat, steam, and cooling.
• State what proportion of their energy consumption and emissions relates to emissions in the UK, including offshore activities.

Unquoted Companies and LLPs

• Report on their UK energy use, including as a minimum electricity, gas, and transport fuel, as well as associated greenhouse gas emissions.
• Provide an intensity ratio — for example, emissions per pound of turnover or per employee — to help contextualise the data.
• Describe the principal measures taken to improve energy efficiency during the reporting year.

Steps to Excel in SECR Compliance

1. Understand Your Obligations
The first step to excelling in SECR compliance is to understand clearly whether your business is obliged to report under SECR, and exactly what data you need to gather.

2. Collect Data Efficiently
Implement systems to collect accurate energy usage data across your operations. Automated data collection systems can reduce the burden and increase the accuracy of the data reported.

3. Choose Relevant Intensity Ratios

Select intensity ratios that not only comply with SECR but also reflect the nature of your business. This makes your data more meaningful and comparable year over year.

4. Implement Energy Efficiency Measures

SECR is not just about reporting but also improving energy efficiency. Invest in energy-efficient technologies and practices, and document these changes as part of your compliance reporting.

5. Prepare for Reporting
Prepare your reports in accordance with the guidelines, ensuring they are clear, accurate, and filed on time. Engaging with professionals for audit and verification can add credibility to your data.

6. Use Reporting to Drive Change
Use the insights gained from SECR reporting to drive strategic decisions in your business. This can lead to cost savings and improved operational efficiencies, further reducing your environmental impact.