SECR: A Guide to Streamlined Energy and Carbon Reporting

Governments around the world are implementing regulations to monitor and control greenhouse gas emissions, with the aim of combating climate change. One such regulation in the United Kingdom is SECR, or Streamlined Energy and Carbon Reporting. But what exactly is SECR, and why is it important?

Let's delve deeper into this topic.

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What is SECR?
SECR stands for Streamlined Energy and Carbon Reporting. It is a mandatory reporting framework introduced by the UK government in April 2019 that replaces the now-defunct Carbon Reduction Commitment (CRC). SECR aims to increase transparency regarding carbon emissions and energy usage among large organizations operating in the UK.

Under SECR, eligible companies are required to disclose their energy consumption, greenhouse gas emissions, and energy efficiency measures in their annual reports. This information provides stakeholders, including investors, customers, and the public, with valuable insights into a company's environmental performance and sustainability efforts.

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Who does SECR apply to?
SECR applies to large UK-incorporated companies and LLPs (Limited Liability Partnerships) that meet certain criteria. Generally, a company is considered eligible for SECR if it meets at least two of the following criteria:

1. It has more than 250 employees.
2. It has an annual turnover of more than £36 million.
3. It has an annual balance sheet total of more than £18 million.

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What are the requirement of SECR Carbon Reporting?

• Scope of Reporting: Companies must report on their total UK energy use, including electricity, gas, and transport fuels. This includes energy consumption associated with activities within the UK, regardless of where the company is headquartered or where its operations are located.

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• Greenhouse Gas Emissions: Companies are required to report on their annual carbon emissions, including Scope 1 (direct emissions from owned or controlled sources, such as onsite fuel combustion) and Scope 2 (indirect emissions from purchased electricity, heat, or steam). Some companies may also voluntarily report on Scope 3 emissions (indirect emissions from sources not owned or controlled by the reporting company, such as supply chain emissions).

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• Energy Efficiency Measures: In addition to reporting on energy consumption and carbon emissions, companies must include a narrative in their report describing any energy efficiency measures undertaken during the reporting period. This could include investments in renewable energy, energy-efficient technologies, or operational improvements aimed at reducing energy consumption and emissions.

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• Comparison with Previous Years: Where practical, companies should provide a comparison of their energy consumption and carbon emissions with previous reporting periods to track progress over time and demonstrate efforts towards continuous improvement.

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• Methodologies and Assumptions: Companies must disclose the methodologies and assumptions used to calculate their energy consumption and carbon emissions, ensuring transparency and consistency in reporting practices.

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• Director's Statement: The company's directors are required to include a statement in the annual report confirming that the required information has been disclosed in accordance with SECR requirements or providing an explanation for any omissions.

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Under the SECR guidelines, the UK government provides a suggested template on pg 51 for organisations to follow.

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It's essential for companies to understand and comply with these requirements to fulfill their obligations under SECR and provide stakeholders with accurate and meaningful information about their environmental performance. Failure to comply with SECR reporting requirements can result in penalties and reputational damage for non-compliant companies. Therefore, it's advisable for eligible organizations to seek guidance from experts or consult official SECR guidance documents to ensure compliance with the regulations.

SECR plays a crucial role in promoting corporate sustainability and combating climate change in the UK. By requiring large companies to report on their energy usage and carbon emissions, SECR increases transparency, drives energy efficiency, supports climate action, and enhances competitiveness. As environmental concerns continue to grow, SECR remains an important tool for holding businesses accountable and driving positive change towards a more sustainable future.

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How can Earthchain help?

Earthchain supports UK-based businesses to measure, manage and report on their emissions in an automated manner. You can lean on Earthchain's technology to do the heavy lifting for you when it comes to data gathering and analysis to ensure that you can report with confidence.

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If we can support you with your measurement or broader efforts around compliance reporting, please don't hesitate to reach out

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