The Streamlined Energy & Carbon Reporting (SECR) regulations will come into effect from 1 April 2019. This is part of the UK Government’s Clean Growth Strategy. These new regulations aim to simplify the carbon and energy reporting requirements for companies. It also aims to encourage businesses to take action to reduce energy-related emissions and costs. The BEIS (the Department for Business, Energy and Industrial Strategy) work on finalizing the guidance is expected at the end of this month. Thus, we thought it would be a good point to review what we know about the SECR and how it will affect companies. Let’s take a look at how Cority can enable you to start preparing the new SECR regulations.
Who will need to comply with SECR?
The new regulations will build on the existing mandatory greenhouse gas emissions reporting. They will complement the Energy Savings Opportunity Scheme (ESOS). They will also replace the CRC Energy Efficiency Scheme which will phase out in April 2019.
The organizations that will need to comply include:
- Quoted companies. Companies who are officially listed on the main market of the London Stock Exchange; or are officially listed in a European Economic Area; or are admitted to dealing on either the New York Stock Exchange or Nasdaq.
- Large unquoted companies;
- Large Limited Liability Partnerships (LLP)
‘Large’ in this case is defined as any company or LLP that satisfies two or more of:
- Balance sheet (£18M+)
- Turnover (£36M+)
- Employees (250+)
Reporting companies would need to include any information related to subsidiaries that are not obliged to report of their own account (according to the criteria above).
Low energy users, who consume less than 40,000kWh per year, are exempt from reporting.
What needs to be reported?
The reporting requirements are likely to differ slightly for quoted and unquoted companies. However broadly, the following information will be required:
- Energy use from electricity, fuel and transport:
- Global consumption for quoted companies
- UK consumption for unquoted companies and LLPs
- Scope 1 and 2 emissions (Scope 3 emissions will remain voluntary).
- Previous year’s emissions and energy consumption figures (except for the 1st year of reporting).
- An intensity metric (such as floor area, units of production, number of full time employees).
- Narrative around the action taken to increase energy efficiency during the reporting year.
- Methodologies used to calculate emissions.
How will SECR affect you?
The good news is that if you’re already reporting to the mandatory greenhouse gas emissions reporting requirements, you won’t need to change your processes a great deal. The additional requirements will include reporting your underlying energy consumption. They will also include providing a narrative on your energy efficiency actions.
If you’re a large unquoted company or LLP, then you may need to start reporting this type of information for the first time. The first step would be to review the compliance requirements. This will help you ensure your company (or subsidiaries) needs to report. If your company falls within the compliance criteria, then you should start gathering energy data for your financial reporting year from the 1st April 2019.
It’s likely that most organizations who have had to submit a return for the ESOS phase 2 will also be required to report to SECR. The same applies to companies who are reporting and purchasing credits for the CRC.
How Cority Can Help With SECR Compliance
Cority’s team of sustainability experts can help you to interpret the SECR guidance to determine whether or not you need to report to SECR, and then formulate a plan for how to comply. Through our sustainability reporting software, and supporting services, we enable organizations to collect, manage and report environmental data accurately and efficiently and comply with regulations such as SECR.
Sustainability Performance Management Software
Cority’s Sustainability Cloud software solutions aligns with SECR reporting needs. Our clients use Cority’s Sustainability Performance Management software as part of their internal reporting processes as well as to report against reporting frameworks including CDP, GRI and UNGC. Cority is a software partner of CDP and GRI, providing accredited content in a platform for integrated reporting.
To help you report under SECR, our software:
- Converts your energy consumption data from different activities (electricity, fuel and transport) into GHG emissions, drawing from our database of international emissions factors.
- Via dashboards and reports, provides users the flexibility to report by different emissions scopes, including scope 3, which although remains voluntary under SECR is increasingly being seen as best practice to report against.
- Enables users to include any intensity metrics they choose, such as floor area, units or production, employee numbers, to help provide further analysis of their data.
- Through our award-winning Initiatives Savings Module, users can track their energy efficiency projects’ savings from across their portfolio, helping them to provide narrative reporting required for the SECR.
Talk to one of our experts to discuss your SECR reporting needs and how we can help you to comply.
