Plans published this week means that, as of April 2019, over 11,900 organisations in the UK will now need to comply with the new streamlined energy and carbon reporting regulations (SECR).
We are a third of the way through the final year of the CRC Energy Efficiency Scheme (CRC), and this week the Department for Business, Energy and Industrial Strategy published the government response to the consultation on Streamlined Energy and Carbon Reporting (SECR), which will replace CRC reporting in 2019.
SECR is part of a package of changes announced by the government which aims to reduce the burden of the current suite of reporting requirements while further incentivising energy efficiency and reducing carbon emissions.
SECR will replace CRC with a simpler reporting framework that builds on the existing mandatory reporting of greenhouse gas emissions by UK quoted companies and the Energy Savings Opportunity Scheme (ESOS). It also references emerging voluntary frameworks like the Financial Stability Board’s Taskforce for Climate-Related Disclosure recommendations.
As anticipated, the government’s proposals are aimed at large unquoted companies. Quoted companies are already obliged to measure and report their greenhouse gas emissions in their directors’ report.
The trajectory of energy and carbon reporting legislation is clearly moving to increasing transparency and verified energy data and first-rate systems for managing energy consumption will be key to the new SECR reporting framework.
Who will now qualify for SECR?
- All quoted companies
- All large UK incorporated unquoted companies and LLPs, using the Companies Act 2006 definition of “large” (companies fulfilling at least 2 of the following conditions in the financial year: at least 250 employees, annual turnover greater than £36m, an annual balance sheet total greater than £18m).
- To reduce the complexity and administrative burden, UK subsidiaries that qualify for SECR will not be required to report if they are covered by a parent’s group report.
- Companies that are not registered in the UK are not obliged to file annual reports at Companies House and will not be in scope for SECR
- Where a parent company is not registered in the UK but has subsidiaries that are, these subsidiaries will be in scope if they qualify for SECR in their own right
- Organisations not registered as companies, for example public sector organisations, some charities and some private sector organisations, are not in scope of the SECR framework
- Companies using less than 40,000 kWh of energy in the reporting year will be exempt from SECR
Did you know? Approximately 11,900 organisations in the UK will need to comply with the SECR legislation. Currently, 4,000 organisations report to CRC.
Top five things you need to know about SECR
- The new SECR legislation will apply to quoted and large unquoted companies registered in the UK (it will not apply to the public sector)
- From April 2019, qualifying unquoted companies will be required to include in their annual Directors’ Report their UK energy use and associated scope 1 and 2 emissions and an intensity metric. Energy use must include electricity, gas and transport
- Quoted companies registered in the UK will continue to be required to report on global energy use and carbon emissions
- Companies will be required to report on energy efficiency actions taken over the previous year
- SECR will allow exemptions from disclosing their SECR information where it is not practical to do so. There will be an additional exemption from disclosing information which the directors think would be damaging to the interests of the company
From April 2019, many large unquoted companies will have to report on energy and carbon for the first time. Navigating the complex reporting landscape and translating the energy saving opportunities into measurable action can be difficult. We have helped numerous companies turn compliance risk into an opportunity. Through robust data management, expert technical advice and effective internal engagement we help companies drive energy and carbon performance.