Streamlined Energy & Carbon Reporting (SECR)
What is SECR?
Streamlined Energy & Carbon Reporting (SECR) is a new industry legislation that will be introduced in April 2019. The scheme will change the requirements for energy and carbon emissions reporting, putting more responsibility on organisations to choose how they measure and report their emissions.
Who needs to comply?
Over 11,900 UK organisations will need to comply with SECR regulations, many of which will be large unquoted companies that haven’t previously reported on energy and carbon.
Large UK incorporated companies will be required to comply with SECR if they have two of the three qualifying conditions; at least 250 employees, an annual turnover greater than £36m and an annual balance sheet total over £18m.
Companies are exempt if they are:
- Not registered in the UK
- UK subsidiaries that qualify for SECR but are already covered by a parent’s group report (unless the parent company is not registered in the UK)
- Public sector organisations, charities and private sector organisations that don’t file reports to Companies House
- Companies that use less than 40,000 kWh of energy in the reporting year
How to comply?
SECR will require businesses to include their energy use (including electricity, gas and transport) emissions and an intensity metric in their annual Directors’ report for financial years beginning on or after 1 April 2019.
The government won’t specify the exact procedures that should be used for energy and carbon reporting, nor will they specify which intensity metrics to use. They will however create guidance on good practice.
All SECR participants must provide a narrative commentary on energy efficiency action taken in the financial year.
Quoted companies must continue to report on scope 1 and 2 greenhouse gas emissions (direct greenhouse gas emissions from owned or controlled sources and indirect emissions generated by purchased energy). Additionally, they’ll be required to report on global energy use, where appropriate. Unquoted companies will now also be required to report scope 1 and 2 emissions. Reporting of scope 3 emissions (all indirect emissions not included in scope 2) will remain voluntary for both quoted and unquoted companies.
SECR has been designed to make energy and carbon reporting simpler, aligning with existing reporting mechanisms to reduce the burden of compliance requirements on organisations. It will also contribute to the government’s Clean Growth Strategy ambition of enabling business and industry to improve their energy productivity by at least 20% by 2030.
SECR will replace the CRC scheme in April 2019. The CRC scheme has required all qualifying organisations to purchase carbon allowances to cover their carbon emissions. As a result, the current CRC charges will be added to the Climate Change Levy (CCL) increasing the CCL on electricity to 0.847p/kWh, and the CCL on natural gas to 0.339p/kWh in 2019/20. Increases of 45% and 67% respectively.
As a result, Climate Change Agreements (CCAs) will become a lot more important to businesses as they aim to ease the impact of CCL costs on manufacturing and industry, giving CCL relief in exchange for a commitment to improve energy efficiency.
How can ENGIE help?
Businesses can benefit from ENGIE’s experienced Compliance Team who can provide end-to-end SECR compliance assistance as a service. ENGIE can take care of all your SECR obligations, calculate accurate emissions for your organisation and provide all necessary documentation for SECR compliance.
Our Chartered Energy Managers can produce your first SECR report, creating a template that fits your business for future use. We will decide the most appropriate metrics to measure your business against and express your emissions as a ratio of activities chosen specifically for your company. We can carry out all necessary audits to ensure you are fully compliant with SECR, with minimal disruption to your organisation.
Our award-winning online energy-management platform, C3NTINEL®, allows us to enhance the way your data is analysed, seamlessly integrating multiple data sources into one platform and providing easy access to large volumes of energy and environmental data. This enables us to provide reliable performance reporting and emissions assessment, whilst giving you detailed information about your energy use and inefficiencies.