What is SECR?
SECR stands for Streamlined Energy and Carbon Reporting and it’s a UK government policy which was launched on 1st April 2019; building on the existing Mandatory Greenhouse Gas (MGHG) reporting, ESOS scheme and the EU Emissions Trading Scheme.
SECR has been designed to ease the process of mandatory reporting for businesses, replacing the likes of CRC and reducing the complexity of energy efficiency policies. This new policy means that a far greater number of businesses will need to carry out this reporting.
This annual energy and carbon reporting is designed to raise awareness with key decision makers within companies, as well as informing markets and government policy. Ideally, SECR should increase the uptake of energy efficiency measures to deliver both economic and environmental benefits.
How do you comply with SECR?
While it isn’t a requirement, it’s recommended that you have external verification or assurance to ensure the accuracy, completeness and consistency of data for both internal and external stakeholders.
Every company will need to report energy use, GHG emissions and at least one emissions intensity metric for the current and previous financial years. You’ll also need to describe your efficiency measures across the year and highlight the resulting energy savings.
They also require that you disclose the methodology used to calculate your findings and it must be robust, transparent and widely accepted.
Other aspects you need to include largely depend on whether your company is quoted or not.
If it is, you’ll need to report your global scope 1 and 2 GHG emissions in tonnes of carbon dioxide equivalent, as well as looking at all seven gases listed in the Kyoto Protocol and an emissions intensity ratio. All of this needs to be done for the current and previous reporting periods.
You’ll also need to report on your underlying global energy use and split it between UK and other countries, which will become a comparison against previous year from 2020 onwards.
For unquoted large companies or LLPs, you’ll need to report UK energy use from electricity, gas and transport fuel and the associated GHG emissions – with at least one intensity metric.
The Comply or Explain Clause
You may have heard about the ‘comply or explain’ clause. This basically allows companies to be able to exclude carbon and energy information where it isn’t practical to get it, or if there’s an exceptional circumstance where disclosure would be prejudicial to the interest of the organisation.
If you feel this applies to you, then you’ll need to put forward a statement explaining what information has been omitted and why. Steps should then be taken to fill any material gaps in the future.
Who needs to comply with SECR?
Businesses that need to comply with the new SECR framework include:
• Businesses that already report under mandatory greenhouse gas reporting regulations
• Large businesses:
o Turnover of £36million or more
o Balance sheet of £18 or more
o 250 employees or more
• Large Limited Liability Partnerships will need to file an Energy and Carbon Report
The government also suggests that private sector organisations that fall outside of this scope voluntarily report in a similar manner, although this is not required.
Who’s exempt from SECR?
Basically, anyone who can confirm that their energy use is low – 40MWh or less over the reporting period – won’t need to complete the SECR report but will need to confirm that they’re a low energy user.
It’s important to note that if your business is part of a group or has subsidiaries then the energy consumption applies to all businesses within that group.
Do I need help with SECR?
Part of our service includes the provision of information to our clients regarding their portfolio. This can be delivered in a way that matches SECR, but if you handle your own data then you just need to understand the formatting and requirements to do this yourself.
If you require an external assessment of your portfolio, then our chartered energy managers can assist you with providing accurate information in the required format.