A recent shift in government commitments has set out an initiative to make the UK carbon neutral by 2050. This has initiated action and commitment from many organisations who can lead the way in driving the net-zero agenda through environmental reporting.
The Streamlined Energy and Carbon Reporting framework (SECR), which came into effect on 1 April 2019, was introduced to bring the benefits of carbon and energy reporting to many more UK businesses. Organisations in scope with a financial year that starts on or after this date will need to comply.
The aim of SECR is to put green credentials into the public domain and help organisations achieve the benefits of environmental reporting. These include:
SECR builds on existing mandatory Greenhouse Gas emissions (GHG) reporting, the Energy Savings Opportunity Scheme (ESOS), and EU Emissions Trading System (EU ETS). It also replaces the reporting element of the closed CRC Energy Efficiency Scheme.
Approximately 11,900 organisations across the UK will need to comply with SECR and report their energy consumption and carbon emissions in their annual financial report. The scheme sets out to support companies cut costs, improve productivity and reduce carbon emissions.
The businesses who will need to comply with these reporting requirements fall into the following groups:
Unquoted companies or LLPs are defined as ‘large’ if they meet at least two of the following three criteria in a reporting year:
Investing the time to define, establish and maintain a robust reporting framework to achieve SECR will also provide invaluable long-term compliance assurance.
A solid environmental reporting framework can be achieved by adopting the following principles:
There is no prescriptive methodology with SECR. Establishing a methodology that is right for your business is crucial as it will be the foundation that will be used for efficient and comparable reporting in future years.
Your SECR report will be included in your annual accounts as submitted to Companies House.
The Conduct Committee of the Financial Reporting Council will be responsible for monitoring compliance of your SECR information provided. If your report does not meet the requirements, it may be rejected, and a penalty applied for late compliance.
For help and guidance on how to get started with SECR, contact us today.
We are experts in data, energy and reporting and can support you to achieve your first SECR report and help you deliver your published sustainability promises. Our service can help in a number of ways: