SECR – What do we know?
Streamlined Energy and Carbon Reporting (SECR) is a new set of regulations that come into force in April 2019. The most salient points of which are set out below.
Under SECR, large businesses across the UK will be required to publicly report energy use, carbon emissions and energy efficiency actions. The legislation seeks to leverage energy efficiency as a mechanism to help realise a blueprint for Britain’s low carbon future.
The ruling comes as a result of the government’s Streamlined Energy & Carbon reporting consultation.The reform package aims to make mandatory energy and carbon reporting “simpler for businesses” by removing administrative obligations.
SECR – who will qualify?
- All quoted UK companies (whose shares are listed on the stock exchange)
- Large UK incorporated unquoted firms (with at least 250 employees or annual turnover more than £36 million and an annual balance sheet totalling more than £18 million) While large businesses are already measuring their energy use under the Energy Savings Opportunity Scheme (ESOS), there is currently no obligation for public disclosure. This however will change under SECR.
Which companies are exempt from reporting?
- 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
What are the SECR reporting requirements from April 2019?
- Qualifying 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 (with Scope 3 reporting remaining voluntary). Energy use must include electricity, gas and transport.
- Companies will be required to report on energy efficiency actions taken over the previous year.
- Quoted companies registered in the UK will continue to be required to report on global energy use and carbon emissions.
Other key takeaways from the SECR framework:
- The method of reporting under the SECR framework will be annual (Director’s) reports.
- Electronic reporting will be voluntary for SECR information from 2019, although the Government will keep mandatory electronic reporting as an option for the longer term. At this stage the Government are not considering holding a central repository (electronic or otherwise) for collating all reporting.
- Reporting must include a narrative commentary on energy efficiency action taken in the financial year.
- The legislation will allow exemptions from disclosing 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.