What Is SECR?
Introduced in April 2019, Streamlined Energy and Carbon Reporting (or SECR) is a new framework, which requires businesses to report annually on their electricity, gas, and transport energy use, along with the associated carbon emissions.
The introduction of SECR coincides with the ending of the Carbon Reduction Commitment (CRC) Scheme, which some companies will already be familiar with, although the qualification criteria is very different and will affect many more organisations. The idea is that the new guidelines will create a simple approach to carbon reporting, whilst also encouraging energy efficiency.
Business and industry accounts for 25% of UK greenhouse gases, so it’s crucial that businesses play a role in helping to reach our emissions reduction target.
Who Does SECR Affect?
The Government estimates that around 11,900 organisations fall within the scope of SECR. The new reporting framework is mandatory for the following organisations:
All UK quoted companies, meaning a company…
·whose equity share capital is officially listed on the main market of the London Stock Exchange; or,
·is officially listed in a European Economic Area State; or is admitted to dealing on either the New York Stock Exchange or NASDAQ.
Any large UK incorporated company or LLP which meets 2 or more of these conditions…
·has more than 250 employees
·has an annual turnover of more than £36m
·has an annual balance sheet total of more than £18m
What Do I Need to Report?
Under SECR guidelines, you’ll need to provide a detailed report on your company’s energy use and greenhouse gas emissions (scope 1 and scope 2), alongside details of the energy efficiency actions you’ve put in place during the reporting period. If you haven’t made any efficiency measures, you’ll need to state this.
Quoted companies also need to report global energy consumption in addition to the mandatory carbon reporting they have already been completing.
All companies must also provide an intensity metric relevant to their business sector. For example, if you’re a manufacturer, you may choose to report tonnes of CO2 equivalent per million tonnes of production. For those in retail, you might report tonnes of CO2 equivalent per m2 of store area.
When and How Do I Submit My Report?
The timeframe for SECR reporting runs in sync with your company’s financial year, meaning that if your business is within scope, you’ll need to report from the start of your first accounting period starting on or after 1st April 2019.
In terms of submission, SECR forms part of your business’ annual reporting obligations, so your energy data must be included within your Directors’ Report and submitted to Companies House in the usual way. LLPs will need to prepare an Energy and Carbon Report for each financial year, to be signed off by LLP members.
Benefits of Carbon & Energy Reporting
Organisations can sign up to SECR voluntarily and there are several benefits to taking a proactive approach. Saving energy is an effective way to reduce business costs, save carbon and help to meet emission targets. SECR can also be used by businesses to promote their sustainability credentials, as part of their wider Corporate Social Responsibility (CSR) efforts.
Companies House may reject your report if it doesn’t meet their reporting requirements. As with all company reporting, fines are in place for late or incomplete submissions, with fines of up to £1,500 for reports which are more than six months late. The penalty will be doubled for those who report late for two years in a row.
The bigger incentive, however, is expected to be the reputational damage that will come from late or missing reports. This may well impact on future business opportunities, particularly given the significant focus now being given to carbon reporting and carbon neutrality targets.
Although many companies are familiar with a certain degree of energy reporting, we would urge [members/clients] to seek expert advice to ensure they remain 100% compliant.
To find out more about how Inspired Energy can help you, get in touch…call 01772 689 250, email email@example.com or visit inspired-referral.co.uk