Colin Lillicrap

Streamlined Energy & Carbon Reporting (SECR)

a vector illustration of animals on the planet for world environment day

Environmental Reporting

In March 2019 the government updated the guidance on Environmental Reporting in “Environmental Reporting Guidelines: Including Streamline Energy and Carbon reporting guidance. March 2019 (updated introduction and chapters 1 and 2). The guidance can be downloaded here This guidance includes changes, which take effect from 1 April 2019, and cover financial reporting years starting on or after this date, replacing the guidance on Mandatory Greenhouse Gas Reporting (MGHG) that was contained in the previous version of this guidance.

Complying with the new Streamline Energy and Carbon Reporting (SECR)

Under the new SECR regulations, large* unquoted companies and large LLPs are obliged to report their UK energy use and associated greenhouse gas emissions as a minimum relating to gas, electricity and transport fuel, as well as an intensity ratio and information relating to energy efficiency action, through their annual reports.

Quoted companies of all sizes continue to be required to report their global greenhouse gas (GHG) emissions and an intensity ratio through their annual reports. Additionally, they are now required to report their total global energy use and information relating to energy efficiency action alongside the methodology used to calculate the new and existing disclosure requirements.

Mandatory SECR – deadline approaching

The environmental Reporting Guidelines covers both mandatory and voluntary reporting. Directors need to be aware of the minimum mandatory SECR reporting deadline as summarised below.

Quoted companies

Large unquoted companies and LLPs

Annual GHG emissions from activities for which the company is responsible including combustion of fuel and operation of any facility; and the annual emissions from the purchase of electricity, heat, steam or cooling by the company for its own use

UK energy use (as a minimum gas, electricity and transport, including UK offshore area)

Underlying global energy use

Associated greenhouse gas emissions

Previous year’s figures for energy use and GHG emissions

Previous year’s figures for energy use and GHG emissions

At least one intensity ratio

At least one intensity ratio

Energy efficiency action taken

Energy efficiency action taken

Methodology used

Methodology used

Companies with financial year April 2019 to March 2020 will soon need to lodge their accounts for this year at Companies House. For the first time the Directors’ report will need to comply with the SECR legislation by reporting on the company’s total energy consumption and greenhouse gas emissions.

Voluntary Greenhouse Gas Reporting

There are a number of greenhouse gases not covered by  Kyoto Protocol and the guidance recommends categorising emission-releasing activities into three scopes

a vector illustration of the greenhouse effect

 Scope 1 (Direct emissions)

Emissions from activities owned or controlled by your organisation that release emissions into the atmosphere. They are direct emissions. Examples of scope 1 emissions include emissions from  combustion in owned or controlled boilers, furnaces, vehicles; emissions from chemical production in owned or controlled process equipment.

Scope 2 (Energy direct)

Emissions released into the atmosphere associated with your consumption of purchased electricity, heat, steam and cooling. These are indirect emissions that are a consequence of your organisation’s activities but which occur at sources you do not own or control.

Scope 3 (Other indirect)

Emissions that are a consequence of your actions,
which occur at sources which you do not own or control and which are not
classed as scope 2 emissions. Examples of scope 3 emissions are business
travel by means not owned or controlled by your organisation, waste disposal
which is not owned or controlled, or purchased materials or fuels.

Companies should report GHG emissions as   gross figure in tonne CO2 equivalent.

Complying with SECR

We  advise companies on setting the boundary of their organisation for SECR purposes using one of the following options

Financial control boundary:

The organisation reports on all sources of environmental impact over which it has financial control.

Operational control boundary:

he organisation reports on all sources of environmental impact over which it has operational control.

Equity share boundary:

The organisation accounts for GHG emissions from operations according to its share of equity in the operation.

Reporting period

The reporting period should be for 12 months and ideally should correspond with the financial year to allow easy comparison of financial and environmental performance.

Inputs to the Directors’ report

We gather energy consumption data for all relevant scope 1, 2 and 3 activities and calculate the associated GHG emissions using the current conversion factors published by the government. We present the results in a recommended format that  includes all mandatory outputs required for the Directors’ report.

    • Total UK energy use (to include as a minimum purchased electricity, gas and transport).
    • Associated greenhouse gas emissions.
    • At least one intensity ratio.
    • Previous year’s figures for energy use and GHG emissions (except in the first year).
    • Information about energy efficiency action taken in the organisation’s financial year.
    • Methodologies used in calculation of disclosures.

We provide a draft narrative report for possible inclusion in the Directors annual report, as well as energy audit services.

Further guidance can be provided on voluntary GHG reporting.

* SECR Qualifying criteria

Quoted companies of all sizes are required to report.

Large unquoted companies and large Limited Liability Partnerships (LLPs) are required to report if they meet two of the following criteria.

● Turnover £36 million or more
● Balance sheet total £18 million or more
● Number of employees 250 or more

Call 01442 873439 to speak to our CIBSE certified experts or
email [email protected]