Streamlined Energy & Carbon Reporting
Companies, Limited Liability Partnerships (LLPs) and groups that qualify as large companies under the Companies Act will be required to report on their UK energy use and carbon emissions within their Director’s Report of the financial statements from financial periods beginning on or after 1 April 2019.
The Streamlined Energy & Carbon Reporting (SECR) has been implemented by the Department for Business, Energy and Industrial Strategy (BEIS). Under the SECR regime, any company, LLP or group that qualifies as large will have to include their energy and carbon information in the Directors’ Report (or equivalent) in their financial statements regardless of whether an overseas parent or group has published a similar report. However, any subsidiaries that are part of a group and would not qualify as large if they were stand alone entities are exempt from report, as are any entities that have consumed less than 40MWh per annum.
What is reportable?
- Direct emissions – either fuel use from transport (whereby the journey begins or ends in the UK) and combustion of natural gas.
- Indirect emissions – any electricity purchase and used (excluding any energy that is subsequently sold on)
- Other indirect emissions – any energy use where the entity is responsible for purchasing or reimbursing fuel for business travel whereby the vehicle is rented or owned by an employee
- An intensity metric for year-on-year usage – for example tonnes of CO2 per full time equivalent employee.
- Supporting narrative – this should include the methodologies used in any calculations, along with any actions taken in the year to improve energy efficiency.
Where the energy and carbon use is considered to be of strategic importance to the entity, the full disclosure may be made in the Strategic Report, with the Director’s Report (or equivalent) containing a statement to indicate where the reporting is, and the reason for reporting in the Strategic Report.