Streamlined Energy & Carbon Reporting (SECR)
Since 1 April 2019, large UK companies have been required to report on their UK energy use and carbon emissions in their financial statements. These regulations were introduced as part of the government’s commitment to Net Zero emissions by 2050 by ensuring large businesses are open about their energy use.
Now, in a world where environmental, social and sustainability issues are becoming ever increasingly important in business decisions, there is an opportunity for companies to build on their post-implementation experience to improve the quality of their SECR reporting and disclosures, and to demonstrate their commitment to helping create a greener world.
As a reminder, SECR impacts large companies, LLPs and groups, i.e. those that exceed at least two of the following three thresholds:
- £36m annual turnover
- £18m balance sheet total
- 250 employees
Organisations may still fall within the scope of SECR even if undertaking public or not for profit activities, this includes companies/ LLPs owned by universities, academies, or NHS Trusts, for instance.
After producing your first set of energy and carbon disclosures, you will need to report current year and comparative information.
Above the minimum requirements, regulators are pushing for companies make disclosures relating to their carbon emissions and energy consumption more understandable and relevant to users of financial statements.
Tying your figures in to your narrative reporting (Strategic report/ Directors’ report) and providing more and specific detail about emission reduction targets, for example, is one way in which you could achieve this: when and how are you going to achieve ‘Net Zero’?
You can also look to include further details about which operations and omissions are included in your figures and, where relevant, which group companies are being reported on. You could also describe to what extent any third-party assurance has been obtained over your reported numbers.
ICAEW’s Carbon and Energy reporting page provides an overview of reporting requirements and links to relevant resources.
As part of a wider strategy/ risk review or as a standalone engagement we can:-
• Provide guidance on your carbon accounting;
• Assist you with defining the reporting scope including operational control and organisational boundaries;
• Review your processes, control, and data outputs to assess the accuracy and completeness of your carbon disclosures; and
• Provide recommendations on best practice in monitoring and reporting operations.
The benefit of getting advice is it ensures accurate, compliant reporting which can boost stakeholder trust and confidence. For more information, and to get in touch, click here.