SECR - UK Legislation Focused on the Future

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As the UK is committed to bring all greenhouse gas emissions to net zero by 2050, it becomes the first major economy to pass net zero laws. Large organisations in the UK are now tasked to lower their carbon emissions in line with net-zero targets; therefore, collating and understanding energy data will be a vital starting point.

What is Streamlined Energy and Carbon Reporting (SECR)?

Mandatory compliance will have a part to play in the form of Streamlined Energy and Carbon Reporting (SECR) since qualifying companies are obliged to report their UK energy use and associated greenhouse gas emissions. The first full reporting year for SECR started 1st of April 2019. This inclusion to annual reporting aims to bring to light the negative aspect companies are having on the planet in terms of climate change. SECR will highlight to owners, stakeholders and also competitors a company’s UK carbon emissions relating to, as a minimum, its gas, electricity and transport fuel usage.

If a company or LLP satisfies two or more of the qualifying conditions listed below, the organisation is obligated to report its UK energy use and associated greenhouse gas emission.

  • Turnover £36 million or more,
  • Balance sheet total £18 million or more, or
  • Number of employees 250 or more.

While some may see the SECR rule as a compliance requirement that demands additional staff and resources, there are many benefits associated with SECR. The primary benefit is that the SECR reporting obligation forces organisations to assess, analyze and understand their energy use through quantifying their data for gas, electricity, and transport fuel use. It is our view, understanding the current energy usage is a vital and necessary step for companies to improve future consumption. Such data will help organisations to effectively evaluate and make decisions on energy efficiency measurements and carbon reduction or other climate change related projects. SECR energy usage data also enables companies to provide greater transparency on business energy efficiency as well as low carbon readiness. Specifically, companies can take the opportunity to highlight positive steps they have taken, including but not limited to procurement of renewable energy and energy efficiency measurements.

Thanks to SECR, large UK companies now have the tools and data to prepare themselves for carbon reduction and sustainability goals.

How would SECR policy evolve in the future?

NUS believe it is reasonable to expect the UK Government to increase the scope of SECR and enforce large unquoted companies and large LLPs to report further emissions. Many industrial and commercial companies have created an environmental, social and corporate governance (ESG) policy, which is dedicated to climate change and reducing the organization’s impact on the environment, i.e., carbon reduction or neutrality commitments by a specific date. Several of them have set ambitious targets for transitioning to renewable energy.

NUS is a leading energy management and sustainability consulting firm with in-depth knowledge and experience, which assist businesses in developing detailed strategic plans to achieve their energy sustainability objectives. Our UK office has a dedicated team supporting clients with energy and carbon compliance reporting as well as other energy performance services, including but not limited to Energy Savings Opportunity Scheme (ESOS), Climate Change Agreement (CCA), and Streamlined Energy and Carbon Reporting (SECR). Additionally, our UK office recently hosted a webinar on “Your Net-Zero Journey,” which received very positive feedbacks from clients and media. Please visit the NUS UK office site or contact us for more information.

More: Research Notes, Climate Change Agreement (CCA), Energy Savings Opportunity Scheme (ESOS), Net-Zero, Streamlined Energy and Carbon Reporting (SECR), Sustainability

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Cameron Skinner