Understanding SECR Reporting in the UK: A Comprehensive Guide

What if your business could not only comply with regulations but also unlock cost savings and build a reputation as a sustainability leader?  

That’s exactly what Streamlined Energy and Carbon Reporting (SECR) offers to UK companies. By combining transparency in energy usage and greenhouse gas (GHG) emissions with actionable energy efficiency measures, SECR reporting transforms regulatory obligations into opportunities for growth and impact. 

But meeting these demands is no small task—many businesses struggle to balance compliance with the urgent need to address their environmental impact. And without clear strategies or actionable insights, they risk falling behind in a rapidly shifting regulatory and economic landscape. 

Did you know?
Swiss Re, a leading reinsurance company, warns that global GDP could plummet by as much as 18% by 2050 if immediate action isn’t taken. For UK businesses, this makes transparent reporting of energy use and carbon emissions more than a compliance issue—it’s a strategic opportunity to lead in sustainability and gain a competitive edge. 

So, how can your organisation embrace SECR reporting requirements and turn them into a strategic advantage?  

Let’s explore the guidance, benefits, and opportunities that make SECR reporting a game-changer for businesses aiming to make a difference. 

What is SECR Reporting? 

SECR, or Streamlined Energy and Carbon Reporting, is a UK government initiative aimed at driving transparency in energy use and carbon emissions. Introduced in April 2019, it replaced the CRC Energy Efficiency Scheme, simplifying how businesses report their environmental impact. The goal? To reduce greenhouse gas (GHG) emissions and encourage energy efficiency across industries. 

It’s not just about ticking boxes. SECR reporting requirements push businesses to identify energy efficiency measures and take action. It’s an opportunity for UK companies to lead the charge in sustainability, improve energy efficiency, and reduce their carbon footprint. 

But how can companies turn these ambitions into reality? 

To truly maximise the benefits of SECR reporting, many businesses are turning to advanced carbon reporting software. Why?  

Because manual processes can be time-consuming, prone to errors, and fail to provide the depth of insights needed to drive real change. Choosing the best carbon reporting software ensures accurate data collection, seamless compliance, and actionable insights to optimise energy usage and reduce greenhouse gas emissions. 

Let's delve in to understand better! 

What are SECR Requirements in the UK and Ireland? 

SECR is a regulatory framework that applies to specific organisations in the UK and, to a lesser extent, aligns with broader carbon reporting practices in Ireland.  

Its goal is to enhance transparency in energy use and carbon emissions while encouraging businesses to adopt energy efficiency measures.  

Checklist 

Affected companies must include the following in their annual reports and directors' reports: 

• Energy consumption: Total energy use from electricity, gas, and transport. 
• Carbon emissions: Greenhouse gas (GHG) emissions associated with the reported energy use. 
• Energy efficiency actions: A narrative on steps taken to improve energy efficiency during the financial year. 
• Methodology: Details on the methodologies used to calculate energy use and emissions. 

Ireland’s Approach 

While SECR reporting framework is specific to the UK, Ireland’s carbon reporting and energy efficiency practices align closely with global sustainability frameworks like the GHG Protocol and the EU's sustainability directives. Irish businesses, especially large ones, are encouraged to report energy use and emissions in line with these standards. 

SECR Reporting Threshold 

Companies below the threshold are exempt but can voluntarily adopt the framework to demonstrate environmental responsibility and enhance stakeholder trust. 

Who Should Report on SECR? 

Certain organisations are required to comply with SECR reporting regulations if they meet specific criteria. Here’s a breakdown of who falls under the scope: 

1. Quoted Companies 

All companies listed on a public stock exchange must report their energy use and emissions under SECR. These organisations were already subject to greenhouse gas (GHG) reporting obligations, so SECR primarily builds on existing requirements for them. 

2. Large Unquoted Companies 

Unquoted companies are classified as “large” under the Companies Act 2006 if they meet at least two of the following conditions: 

• Annual turnover exceeds £36 million. 
• Balance sheet total is more than £18 million. 
• The organisation employs more than 250 employees. 

3. Large Limited Liability Partnerships (LLPs) 

LLPs are also required to comply with SECR if they meet the same thresholds as large unquoted companies under the Companies Act 2006. 

4. Charities and Non-Profit Organisations 

Charities and non-profits that qualify as “large” under the Companies Act 2006 must also adhere to SECR reporting requirements, even if they operate under a charitable structure. 

5. Public Bodies and Other Entities 

Public bodies are not covered under SECR. However, organisations providing public services—such as NHS subsidiaries or UK universities—may still fall under the regulations if they do not qualify as public bodies under the law. 

Understanding whether your organisation is required to comply ensures that you stay ahead of regulatory requirements and can focus on reducing energy use and emissions effectively. 

What to Include in Your SECR Report? 

1. Total Energy Consumption 

• Report energy use from electricity, gas, and transport for the financial year. 
• Quoted companies must include global energy consumption. 

2. Greenhouse Gas (GHG) Emissions 

• Disclose Scope 1 (direct) and Scope 2 (indirect) emissions. 
• Include Scope 3 emissions if applicable (optional for most but required for quoted companies). 

3. Energy Efficiency Actions 

• Summarise actions taken to improve energy efficiency during the year. 
• Examples: equipment upgrades, renewable energy adoption, or insulation improvements. 

4. Methodology Used 

• Explain the calculation methods, such as using the GHG Protocol or ISO standards. 

5. Intensity Ratios 

• Include at least one ratio, like emissions per unit of revenue or per square metre. 

Additional for Quoted Companies 

1. Breakdown of renewable vs non-renewable energy. 
2. Trends or comparisons from previous years. 
3. Reporting on emissions and energy use outside the UK. 

By ensuring these elements are included, your SECR report will meet compliance standards and highlight your organisation’s sustainability efforts. 

Fact Check
SECR requires around 11,900 large UK-based companies to report their annual energy consumption, carbon emissions, and the energy efficiency measures they’ve implemented. This expanded reach promotes transparency and drives actionable change across a broader spectrum of industries. 

Note: 

It’s crucial to understand that SECR complements other emissions reporting requirements rather than replacing them. These include: 

• Energy Savings Opportunity Scheme (ESOS): Aimed at conducting energy audits and providing recommendations for large businesses. 
• Climate Change Agreements (CCA) Scheme: Offers tax incentives for energy-intensive industries to improve energy efficiency. 
• EU Emissions Trading Scheme (ETS): Focused on carbon trading for specific sectors to reduce overall emissions. 
• Mandatory Greenhouse Gas (GHG) Reporting: Required for publicly quoted companies to disclose their emissions data transparently. 

Exemptions to SECR Reporting 

While SECR reporting applies to many organisations, there are certain exemptions that allow businesses to simplify or omit parts of their report. These include:

1. Group Reporting Exclusion

If your company reports at the group level and a subsidiary would not independently fall under SECR regulations, you can exclude energy and carbon data for that subsidiary.

2. Low Energy Users

Organisations consuming 40MWh or less of energy during the financial year are classified as "low energy users." While they are not required to submit a full SECR report, they must still calculate their total energy consumption across gas, electricity, and transport fuel to confirm they fall below the threshold. In such cases, the directors’ report must state that the company qualifies as a low energy user, explaining why a detailed SECR report is not provided.

3. Commercial or Practical Constraints

If gathering energy and carbon data is either commercially sensitive or genuinely impractical, organisations can claim an exemption. However, a clear explanation must be included in the director's report to justify the omission. 

These exemptions ensure that SECR reporting remains proportionate and practical, allowing businesses to comply without undue burden where justified. 

Benefits of SECR Reporting 

• Improved Transparency: Demonstrates accountability by providing clear insights into energy use and carbon emissions. 
• Energy Efficiency Savings: Identifies opportunities to reduce energy consumption, leading to significant cost savings. 
• Regulatory Compliance: Ensures businesses meet UK government requirements, avoiding penalties and enhancing trust with stakeholders. 
• Competitive Advantage: Positions organisations as sustainability leaders, appealing to environmentally conscious customers and investors. 
• Environmental Impact Reduction: Drives measurable action toward lowering greenhouse gas (GHG) emissions and achieving sustainability goals.  

Carbon reporting platforms like Mavarick help businesses capture accurate carbon emissions data and streamline reporting. empowers organisations to make informed decisions that drive meaningful progress toward a more sustainable future. 

Common Challenges in SECR Reporting

1. Data Collection and Accuracy 

Gathering reliable data on energy use and carbon emissions across multiple locations and operations can be complex. Inconsistent methodologies or incomplete data can lead to inaccuracies, making compliance and decision-making difficult. 

2. Resource and Cost Implications 

Complying with SECR reporting requirements often requires significant time, effort, and resources, especially for companies new to environmental reporting. Smaller teams may struggle to allocate the expertise and tools necessary for accurate reporting. 

3. Incorporating Energy Efficiency Actions 

Identifying and implementing effective energy efficiency measures is a challenge for many businesses. Reporting on these actions requires both clear documentation and measurable outcomes, which can be difficult to achieve without proper guidance or tools. 

Solution Insight: Tools like Mavarick’s carbon reporting software simplify data collection, ensure accuracy, and provide actionable insights to help businesses overcome these challenges. Learn more here. 

How to Prepare for SECR Reporting? 

Preparing for SECR reporting may seem daunting at first, but with a structured approach, it becomes a manageable and even rewarding process. Here’s how you can get started: 

1. Understand the Requirements 

Familiarise yourself with SECR reporting thresholds and what needs to be included, such as energy use, carbon emissions, and energy efficiency actions. 

2. Gather Accurate Data 

Collect data on energy consumption, greenhouse gas (GHG) emissions, and transport usage across all relevant operations. 

3. Choose a Reliable Methodology 

Use standardised frameworks like the GHG Protocol to calculate emissions accurately and consistently. 

4. Set Up Internal Processes 

Assign responsibilities, streamline data collection, and implement a clear timeline for compiling the report. 

5. Identify Energy Efficiency Actions 

 Highlight steps taken to improve energy use, such as equipment upgrades or energy-saving policies. 

6. Use Carbon Reporting Software 

Simplify reporting with tools like Mavarick, which ensure accurate data collection, compliance, and actionable insights. 

7. Review and Verify 

Double-check your report for accuracy and ensure it aligns with the SECR reporting framework before submitting. 

Conclusion 

As the urgency to combat climate change grows, SECR reporting is an opportunity for organisations to rise to the challenge and lead the way toward a more sustainable future. Now is the time to take action—not just to meet regulatory standards but to create a lasting positive impact for the planet and your business. 

Whether you're navigating the complexities of compliance or aiming to integrate sustainability into your operations, SECR provides a structured path to align environmental goals with business growth. With the right tools, like advanced carbon reporting platforms, companies can streamline data collection, ensure accuracy, and uncover actionable insights that fuel both compliance and innovation. 

Connect with Mavarick today to discover how our solutions can simplify SECR reporting and drive your sustainability goals forward. 

Frequently Asked Questions (FAQs) 

1. What is SECR Reporting?

SECR (Streamlined Energy and Carbon Reporting) is a UK government initiative that requires certain companies to report their annual energy consumption, carbon emissions, and energy efficiency actions as part of their directors' report. 

2. Who Needs to Comply with SECR?

SECR applies to quoted companies, large unquoted companies, and large limited liability partnerships (LLPs) that meet at least two of the following criteria: an annual turnover of £36 million or more, a balance sheet total of £18 million or more, or 250 employees or more. 

3. What Needs to Be Included in an SECR Report?

• Total energy use (electricity, gas, and transport). 
• Greenhouse gas (GHG) emissions (Scope 1 and Scope 2). 
• Energy efficiency measures were undertaken during the year. 
• Methodologies used for calculations. 

4. Are There Any Exemptions to SECR?

• Yes, exemptions include: 
• Low-energy users consume less than 40MWh annually. 
• Subsidiaries are excluded at the group reporting level. 
• Data deemed commercially sensitive or unfeasible to obtain, with justification provided. 

5. How Can Businesses Simplify SECR Reporting?

Using carbon reporting software like Mavarick can make SECR compliance seamless. These tools automate data collection, ensure accuracy, and provide insights to improve energy efficiency. Learn more about Mavarick’s solutions here. 

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