What Is SECR and Why Do You Need It?

On our SECR page, we’ve offered some clear guidance as to what SECR is and who needs it. But if you’re still confused, this article should hopefully clear things up and make it clear what SECR is and who needs to care about it.

What is SECR?

SECR stands for Streamlined Energy and Carbon Reporting. It is legislation that was introduced in April 2019 after both the Companies (Director’s Report) and Limited Liability Partnerships (Energy and Carbon Report) Regulations came into force in 2018. Full guidance is available on the government’s own website. But rather than make you wade through that, we’ve tried to explain it as easily as we can.

SECR is a regulation that affects up to 12,000 businesses in the UK and establishes requirements for reporting greenhouse gas emissions as part of your end-of-year accounts. In short, SECR is a way to standardise the way large businesses report their carbon emissions and energy usage.

The benefit, as the name suggests, is that it streamlines your reporting commitments.

Who needs to care about SECR?

Businesses must meet two of the following criteria to be eligible for SECR:

  • More than 250 employees.
  • Annual turnover exceeding £36m.
  • Balance sheet exceeding £18m.

However, SECR responsibilities can fall on different people within the company itself. The Financial Director must be aware of SECR as it falls directly within their remit. However, they often choose to then delegate the SECR-related duties to an Environmental Manager, Facilities Manager or another employee within the business.

To put this simply, if you’re a Financial Director, Environmental Manager or Facilities Manager at a company that meets two of the criteria listed above, you should know what SECR is and have a plan to deal with it. It’s not a thing to put off and worry about later, as non-compliance can cause lots of issues.

Are there exemptions to SECR?

If your company uses -40MWh or less over the reporting period, you are exempt from SECR. However, you will still need to include a statement in your year-end reports to declare you are a low energy user.

What does a SECR report include?

If you fall under the SECR scheme, you must report on your business’s energy use, carbon emissions and any actions taken towards energy efficiency. These figures are expected to be included in your annual reports alongside financial data.

However, the specifics of what you must report as a minimum will vary depending on your company type.

For UK incorporated quoted companies, you must report:

  • The quantity of greenhouse gas emissions (GHG) and energy consumed from the purchase of gas and electricity for own use.
  • Indication of what proportion of energy consumed occurred in the UK.
  • Measures taken to increase energy efficiency.
  • At least one intensity ratio

For large UK incorporated unquoted companies, you must report:

  • The quantity of GHGs and energy consumed in the UK related to the combustion of fuel for transport, or for the combustion of gas for energy.
  • The purchase of electricity for your own use.
  • Actions taken to increase efficiency.
  • At least one intensity ratio

Large UK incorporated LLPs must report:

  • A report which is equivalent to a director’s report and covers figures on energy consumption, energy efficiency measures and GHG emissions.

Why is SECR useful?

Not only is SECR a mandatory replacement for the CRC Energy Efficiency Scheme, but it also has benefits to your business. By accounting for carbon emissions, you can see the potential savings of energy efficiency measures and areas of energy waste that can be addressed. It allows you to put a real cost to your energy emissions, gain commercial benefit via energy savings and establish your ‘green credentials’ as the UK drives towards a more energy-efficient future.

If you’ve read this whole article, you’ll have a better understanding of whether or not SECR is something you need to pay attention to. If it is and you want to work with a company that can make SECR simple, you’re in the right place. We will prepare a comprehensive SECR report that takes care of the heavy lifting and makes compliance easy. Get in touch to find out more.

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