Streamlined Energy and Carbon Reporting (SECR) Framework explained

What is the Streamlined Energy and Carbon Reporting (SECR) Framework?

Introduced in 2019, the Streamlined Energy and Carbon Reporting (SECR) is the UK government’s mandatory policy requiring certain organisations to provide details of the energy they use and their greenhouse gas (GHG) emissions in their annual reports. It means they can report their climate impact according to a single, agreed standard. This will make it simpler to compare different organisations’ environmental performance.

Who must comply with SECR?

• All companies that are listed on public stock exchanges
• Large companies that are not listed on stock exchanges
• Large Limited Liability Partnerships (LLPs)

Your organisation is considered ‘large’ under SECR if it meets two or more of these criteria:

• Turnover of £36 million or more
• Balance sheet of £18 million or more
• 250 or more employees

Are there any exemptions to SECR?

Even if your organisation’s a large LLP or a large unlisted company, you’ll be exempt from SECR requirements if you use less than 40 MWh in energy in total over the reporting period covered.

What do I have to report under SECR?

There are two reporting frameworks under SECR, one for companies listed on public stock exchanges, the other for large unlisted companies and large LLPs.

SECR reporting for listed companies:

If you’re a listed company, you’ll need to report:

• Your global Scope 1 and Scope 2 emissions (Scope 3 reporting is recommended but not mandatory)
• At least one energy intensity ratio
• Underlying global energy use for the period in question
• The figures for previous period’s energy use and greenhouse gas (GHG) emissions
• Details of any actions you have taken to improve energy efficiency during the period in question
• Details of the methodology used

SECR reporting for large unlisted companies and large LLPs:

If you’re an unlisted company or a large LLP, you’ll need to report:

• Your UK energy use for the period in question
• At least one intensity ratio
• The figures for previous period’s energy use and greenhouse gas (GHG) emissions
• Details of any actions you have taken to improve energy efficiency during the period in question
• Details of the methodology used

SECR requirements for offshore organisations

If your organisation is ‘offshore’ – if your activities consist wholly or mainly of offshore activities – then you’ll need to report your UK and your offshore energy use and emissions.

What’s an energy intensity ratio?

Energy intensity expresses the energy required for a unit of activity, output, or any other metric that is specific to your organisation. Using these enables readers to compare your organisation’s energy intensity with that of others. For example, your product intensity would provide the ratio between the energy consumed per unit produced. The government recommends that you include the intensity ratio in your report that is most relevant to your organisation and will provide the most context to users of the information.

What methodology can I use for SECR reporting?

The aim of SECR is to make it simple to compare the environmental impacts of different organisations. This means that transparent, standard and widely accepted methodologies are strongly recommended, such as:

• GHG Reporting Protocol - Corporate Standard
• International Organisation for Standardization, ISO (ISO 14064-1:2018)
• Climate Disclosure Standards Board (CDSB)
• The Global Reporting Initiative Sustainability Reporting Guidelines

There is no set format to report SECR. However, the government has created a reporting template which they strongly encourage organisations to use to make comparison simple.

What if I can’t report on something under SECR?

One of the principles behind SECR is ‘comply or explain’. This means that if you can’t comply with any aspect of it, then you must explain why. This could be because the information is not available, or because you believe sharing it would be seriously prejudicial to your organisation.

Need more help?

At Drax, we’ve got the expertise to help you with your organisation’s carbon reporting. And in collaboration with our partner, Notch, we’re able to offer comprehensive carbon accounting for your organisation, plus free net zero training worth £2,500.