Preparing for the Streamlined Energy & Carbon Reporting (SECR) regulations
As part of the UK Government’s Clean Growth Strategy, the Streamlined Energy & Carbon Reporting (SECR) regulations will come into effect from 1 April 2019. The aim of these new regulations is to simplify the carbon and energy reporting requirements for companies, and encourage businesses to take action to reduce energy related emissions and costs.
Whilst BEIS (the Department for Business, Energy and Industrial Strategy) work on finalising the guidance, expected at the end of this month, we thought it would be a good point to review what we know about the SECR, how it will affect companies and take a look at how Greenstone can help you to comply with the new regulations.
Who will need to comply with SECR?
The new regulations will build on the existing mandatory greenhouse gas emissions reporting, complementing the Energy Savings Opportunity Scheme (ESOS) and replacing the CRC Energy Efficiency Scheme which is being phased out in April 2019.
The organisations 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 and 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, to 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 organisations who have had to submit a return for the ESOS phase 2 will also be required to report to SECR, as with companies who are reporting and purchasing credits for the CRC.
How Greenstone can help with SECR compliance
Greenstone’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 organisations to collect, manage and report environmental data accurately and efficiently and comply with regulations such as SECR.
If you are collecting and reporting the information required under SECR for the first time or simply don’t have the internal resource, Greenstone can provide a bureau service. This flexible data collection and management service helps ensure that all data is collected efficiently across your business with a clear audit trail. As part of this service, we chase people up if they get behind and check the data for errors and anomalies, giving you extra confidence in the numbers you report. And, we’ll ensure a smooth handover if you decide you want to move data collection and management in-house.
Sustainability reporting software
The Environment module of Greenstone’s Enterprise software aligns with SECR reporting needs.
Our clients use Greenstone’s environmental reporting software as part of their internal reporting processes as well as to report against reporting frameworks including CDP, GRI and UNGC. Greenstone 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.
Please get in touch with our team to discuss your SECR reporting needs and how we can help you to comply.
Learn more about SECR - Download our guide on 'Streamlined Energy & Carbon Reporting (SECR)'