Introduction
The Streamlined Energy and Carbon Reporting (SECR) is the UK's sustainability reporting framework that requires companies to disclose their annual energy usage and GHG emissions. It applies to all quoted companies, large unquoted companies incorporated in the UK, and large limited liability partnerships (LLPs).
SECR aims to encourage improved energy efficiency, provide transparency for stakeholders, and align with the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD).
As a UK company, should I report under SECR ?
Here is the decision tree:
A company is a large company if it satisfies at least 2 of the following criteria:
Turnover £36 million or more
Balance sheet total £18 million or more
Number of employees 250 or more
Mandatory Requirements
Quoted companies
Annual global emissions from activities for which that company is responsible including the combustion of fuel and the operation of any facility (=total scope 1 & 2 emissions); together with the annual emissions from the purchase of electricity, heat, steam or cooling by the company for its own use. [Also referred to as Global GHG Protocol Scope 1 and Scope 2 emissions]
Disclosure of Scope 3 emissions is voluntary but encouraged
Underlying global energy use (in kWh most of the time) that is used to calculate GHG emissions (breakdown of energy use is optional)
Proportion of the energy consumption and the related emissions that occurs in the UK (including offshore area).
Comparatives (except for the first year)
At least one ratio expressing emissions in relation to a quantifiable factor associated with the company’s activities, for example, emissions per £m revenue
Methodologies used in calculation of disclosures.
Information about energy efficiency action taken in the organisation’s financial year. Where no such measures have been taken, the disclosure is not required but the Guidelines recommend that a statement to this effect should be included.
Unquoted companies and LLPs
Annual emissions (UK and offshore area only) from activities for which that entity is responsible involving: (a) the combustion of gas; or (b) the consumption of fuel for the purposes of transport; together with the annual emissions from the the purchase of electricity by the entity for its own use, including for the purposes of transport.
Disclosure of Scope 3 emissions is voluntary but encouraged
UK energy use (to include as a minimum purchased electricity, gas and transport). Transport includes business travel and employee commuting emissions.
Comparatives (except for the first year)
At least one ratio expressing emissions in relation to a quantifiable factor associated with the company’s activities, for example, emissions per £m revenue
Methodologies used in calculation of disclosures.
Information about energy efficiency action taken in the organisation’s financial year. Where no such measures have been taken, the disclosure is not required but the Guidelines recommend that a statement to this effect should be included.
Low energy users
Such an organisation is required to state, in its relevant report, that its energy and carbon information is not disclosed for that reason.
Criteria:
Quoted companies: < 40MWh of energy consumption during the period.
If the quoted company is preparing a group Directors’ Report, the assessment is of the energy consumption of the parent and its subsidiaries which are included in the consolidation and are quoted companies, unquoted companies or LLPs. In assessing whether or not the 40MWh threshold is met, companies in scope must consider all the energy usage.
Unquoted companies or LLPs: < 40MWh of energy consumption in the UK, including offshore area, during the period.
If the company or LLP is preparing a group Report, the assessment is of the energy consumption of that parent and its subsidiaries. In assessing whether or not the 40MWh threshold is met, companies in scope must consider all the energy from gas, electricity and transport fuel usage.
Where to report SECR?
For quoted companies and large unquoted companies, information should be reported in directors’ report, or the strategic report where it is of strategic importance.
For LLPs, it should be reported in the 'energy and carbon' report.
There is no prescribed proforma for reporting – organisations could develop their own format to fit their business but any reporting format should provide at least the minimum information requirements and comparisons of data for the previous year (as it becomes available) in as accessible a format as possible.
Organisations are encouraged to report SECR information in a digital format, (such as inline XBRL, or iXBRL), if the annual report and accounts are also filed digitally. In this case, SECR information should be reported in the same digital format as the annual report and accounts.
Official guidelines can be found here: Environmental reporting guidelines