Which companies need to comply with SECR?

SECR will apply to companies registered with Companies House meeting any two of the following three criteria:

Charities and Multi Academy Trusts (MATs) will need to comply with SECR. Businesses using 40Mwh or less in a year are exempt, but need to produce a statement confirming their energy use. Public sector organisations are exempt from SECR reporting requirements. 

How does a company become SECR compliant?

In order to comply with the new framework, companies need to record information on their business' total global emissions for energy and transport, with an intensity ratio, and the split between UK and offshore use, as well as any efficiency action taken. Unquoted companies and LLPs will need to report on UK energy use, with a minimum of electricity , gas and transport looking at Scope 1 and 2 greenhouse gas emissions. Emissions reporting for quoted companies will need to include Global GHG Protocol Scope 1 and 2 emissions. After the initial year, companies will need to report on the previous year's figures to achieve SECR compliance. The SECR report follows the company's financial year and needs to be lodged along with the AFS at Companies House.

What are the penalties for non-compliance?

SECR is enforced by the Conduct Committee of the Financial Reporting Council and they monitor the compliance of reports submitted to Companies House. Failure to comply will see annual reports rejected, which will then incur a late filing penalty under section 451 of the Companies Act 2006. This could then escalate to civil action taken against directors or members of an LLP under section 451 of the Act.

Longer term compliance planning

Companies need to comply with SECR every financial year, so putting a long-term plan in place can help make this process smoother and faster in years to come. Having a good data management plan in place is a significant part of the compliance workload. There is a link between ESOS and SECR. While SECR does not require formal audits, it does gather the required data needed for a large part of ESOS. SECR does not mandate you make carbon reduction changes but most want to do so if it makes commercial sense. These can be referenced in ESOS.

What are the benefits of reporting?

Measuring and reporting on environmental performance highlights opportunities to improve your business' energy efficiency and cut costs as well as carbon emissions. For advice on SECR for your business, complete the form above.