WHAT IS IT?

Since 2019, large UK companies have been required by the UK government to publicly report on their energy use and carbon emissions as a part of their Director's report.

From 2020 onwards, companies have been required to disclose their prior year's figures for comparison.

This requirement is impacting circa 12,000 businesses across the UK, most of which are reporting their emissions for the first time.

For some companies, SECR replaces the Carbon Reduction Commitment (CRC) Energy Efficiency Scheme that ended in 2019.

SECR also replaces and widens the Mandatory Greenhouse Gas Reporting (MGHG), which demands quoted companies to report only their annual GHG emissions.

WHAT IS THE BENEFIT?

The aim of the reporting requirement is to provide greater transparency to all stakeholders, but also to increase awareness inside organizations concerning energy costs, and to provide them with data about energy efficacy improving measures, therefore cutting their negative impacts.  

DO I NEED TO COMPLY?

SECR applies to quoted companies, large unquoted companies and large LLPs.

A “large” unquoted company is defined by the Companies Act as having two or more of the following requirements:

• employ 250 or more people
• have an annual turnover of £36 million or more
• have an annual balance sheet of £18 million or more

If your business fit the above criteria but the annual consumption is 40MWh or less during the reporting period, you are not required to disclose energy and carbon information, however, you are required to state why it is not being disclosed.

WHAT TO DISCLOSE?

Quoted companies:

• Energy consumption and greenhouse gas (GHG) emissions for reporting period
• Underlying global energy use 
• Previous year’s figures for energy use and GHG emissions
• At least one intensity ratio
• A "narrative description" that explains the energy efficiency measures taken
• The methodology used for the calculation of the reported data
  

Unquoted companies:

• Energy consumption and greenhouse gas (GHG) emissions for reporting period
• Previous year’s figures for energy use and GHG emissions
• At least one intensity ratio
• A "narrative description" that explains the energy efficiency measures taken
• The methodology used for the calculation of the reported data

As a generic rule, reporting companies are expected to publish their SECR disclosures as a part of their Director's report.

However, in the case where energy use and emissions are of strategic importance to the company, it is possible to make the disclosure in the Strategic report instead. If a company chooses to make the disclosure in its Strategic report, the decision will need to be clearly indicated and explained in the Director's report.

WHAT IS THE DEADLINE?

SECR is annual: disclosures cover the same reporting period as the financial year of your business, and if this is not the case, a separate explanation for the deviation is required.

HOW LONG DOES IT TAKE TO COMPLETE THE ASSESSMENT?

There is no right answer as this depends on each business structure, however planning in advance is key and we would highly recommend starting as soon as possible.

WHAT ARE THE PENALTIES FOR NON-COMPLIANCE?

The Conduct Committee of the Financial Reporting Council are in charge of enforcing SECR.

Late filing penalties are up to £7,500 depending on the type of company and how late the accounts are submitted.

OUR APPROACH:

We are trusted by many clients for our specialist advice, our ability to make smart decisions and our readiness to provide lasting value. Our broad technical expertise and deep market knowledge means we are well placed to offer insight and pragmatic advice.

Would you like to know more?

Or do you have any questions about one or more of these topics?

Feel free to contact us at hello@bramoenergy.com.