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. The Welsh public sector and many UK local authorities have declared climate change emergencies, pledging to become carbon neutral by 2030. Many public sector and private organisations are familiar with carbon reporting through the Carbon Reduction Commitment (CRC) Energy Efficiency Scheme, which has now ended, and many are continuing their commitment to reducing emissions with the voluntary emissions pledge.
Organisations can lead the way in driving the net-zero agenda through environmental reporting. The Streamlined Energy and Carbon Reporting framework (SECR) has been introduced to bring the benefits of carbon and energy reporting to many more UK businesses. SECR came into effect on 1 April 2019; organisations with a financial year that start on or after this date will fall into scope.
SECR will put green credentials into the public domain and could be seen as a mandatory task that has many benefits, including:
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.
The framework requires approximately 11,900 organisations across the UK to report their energy consumption and carbon emissions in their annual report. It sets out to support companies to 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 will 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.
We are experts in data, energy and reporting and can support you with your first reporting and help you deliver your published sustainability promises. Our services can help in a number of ways:
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.