Introduction:
The Streamlined Energy and Carbon Reporting (SECR) regulations, introduced in 2019, form a key part of the UK Government’s strategy to increase corporate transparency around energy use and carbon emissions. Replacing the Carbon Reduction Commitment (CRC) Energy Efficiency Scheme, SECR aims to simplify reporting requirements while encouraging organisations to take meaningful action to reduce their environmental impact. The regulations require eligible companies to annually disclose information on energy consumption, greenhouse gas emissions, and energy-efficiency measures. This summary outlines the scope, duties, and operational requirements established under SECR.
Scope and Definitions:
SECR applies to three main groups: quoted companies, large unquoted companies, and large Limited Liability Partnerships (LLPs). “Large” is defined using the Companies Act 2006 criteria—meeting at least two of the following: 250 employees, £36 million turnover, or £18 million balance sheet total. Quoted companies must report global energy use and emissions, while large unquoted companies and LLPs report UK energy use and associated emissions. Key definitions include “energy consumption” (covering electricity, gas, and transport fuel) and “greenhouse gas emissions” (in line with the GHG Protocol scopes). Certain exemptions exist, such as for organisations where energy use is exceptionally low or reporting would be commercially sensitive.
Employer Responsibilities:
Employers falling within SECR’s scope must collect, calculate, and report accurate annual data on their energy consumption and greenhouse gas emissions. They must also disclose at least one principal energy-efficiency action undertaken during the reporting period. Reports must be included within the company’s Directors’ Report or an equivalent LLP Energy and Carbon Report. Employers must implement systems to track energy use, ensure data quality, and apply approved methodologies for emissions calculation. Where exemptions apply, employers must clearly state and justify them. Compliance requires maintaining comprehensive records, cooperating with auditors where applicable, and ensuring transparency for stakeholders.
Employee Responsibilities:
Employees, particularly those in finance, sustainability, facilities management, and operations, play a key role in gathering and managing the data needed for SECR compliance. They must follow internal procedures for monitoring energy use, maintain accurate records, and support emissions calculation processes. Employees may contribute to identifying and implementing energy-efficiency initiatives, participate in training, and help ensure that reported information is complete and reliable. Their cooperation is essential for meeting statutory reporting requirements and supporting organisational sustainability goals.
Energy Use, Emissions, and Methodologies:
SECR requires organisations to report total energy consumption from electricity, gas, and transport, alongside the resulting greenhouse gas emissions expressed in tonnes of CO₂ equivalent. Companies must clearly outline the methodologies used, ensuring consistency with recognised standards. Organisations must also provide intensity ratios—such as emissions per unit of turnover or per employee—to enable comparison over time. By standardising disclosure, SECR promotes greater transparency and enables stakeholders to assess organisational progress on carbon reduction.
Enforcement and Penalties:
SECR is enforced through the UK’s existing company reporting framework. Failure to comply with reporting requirements may lead to enforcement actions by Companies House or the Financial Reporting Council. Penalties can include rejection of annual reports, financial sanctions, or reputational consequences for failing to disclose environmental information. Ensuring timely, accurate reporting helps organisations maintain compliance and demonstrate corporate responsibility.
The SECR regulations play a vital role in increasing transparency, driving energy efficiency, and supporting the UK’s transition to a low-carbon economy. By mandating clear reporting requirements, the regulations encourage businesses to better understand their energy use and take meaningful action toward reducing emissions.