SECR: Master Reporting Requirements & Stay Compliant
Key Takeaways
Definition: SECR is a UK government framework requiring large companies to report their annual energy use and carbon emissions.
SECR Reporting Requirements: Companies must report total energy use, greenhouse gas (GHG) emissions (including Scopes 1 and 2), an emissions intensity ratio, and a narrative on energy efficiency measures.
Goal: SECR aims to increase awareness of energy costs, promote energy efficiency, and help reduce carbon emissions in line with global net-zero goals.
Find out what the Streamlined Energy and Carbon Reporting (SECR) framework means for businesses in the UK and what you need to do to stay fully compliant.
What Is SECR?
Streamlined Energy and Carbon Reporting (SECR) is a regulatory framework ensuring large UK businesses report on their energy and carbon emissions. It mandates public disclosure of energy usage, associated greenhouse gas (GHG) emissions, and a description of actions being taken to improve energy efficiency year-over-year.
Who Is Subject to SECR Regulations?
SECR requirements apply to all UK-incorporated quoted companies on stock exchanges, large UK-incorporated companies not quoted on exchanges, and large limited liability partnerships (LLPs). Companies also may elect to participate in SECR voluntarily as a means to improve their energy consumption and carbon footprint.
What Is the Purpose of SECR?
The primary purpose of SECR is to encourage greater corporate environmental responsibility. By mandating transparency, the regulations raise awareness of energy costs, provide actionable data for improving energy efficiency, and drive reductions in carbon emissions. SECR aligns with global standards promoting net-zero emissions by helping balance greenhouse gas output with carbon removal efforts.
Who Is Required to Submit an SECR Report?
Submitting a SECR report is mandatory for all companies quoted on UK stock exchanges and any unquoted company or LLP designated as "large." A company is considered large if it meets at least two of the following three criteria within a reporting period.
- Annual turnover (or gross income): £36 million or more
- Balance sheet assets: £18 million or more
- Employees: 250 or more
Even if a company is classified as large, it may be exempt from SECR reporting if it can demonstrate that its energy consumption during the reporting period was 40,000 kWh or less.
What Are the SECR Reporting Requirements?
To ensure full SECR compliance, affected companies must include a specific set of metrics and disclosures in their annual reports.
- Electricity usage, both for powering operations and transportation
- Gas consumption for both mobile and stationary activities
- Transportation fuel consumption is used for purposes such as fueling company vehicles and minibusses
- Greenhouse gas consumption
- Emissions intensity ratio, which is a metric measuring emissions from one year to the next
- The methodology used to calculate the required information
- A narrative explaining steps being taken to improve energy efficiency
- Prior year figures for comparison, when applicable
How Does the SECR Reporting Process Work?
SECR disclosures must be integrated into your organization's annual filings submitted to Companies House. The specific report depends on your company type:
1. Quoted & Unquoted Companies: Include the SECR report within the Directors' Report.
2. LLPs: Submit a dedicated Energy and Carbon Report alongside the annual report.
3. Companies, where energy use and carbon emissions are of particular strategic importance: Include it in your strategic reports.
4. Charitable Organizations: Integrate it into the combined Directors' and Trustees' Annual Report.
The reporting deadline is based on your company’s financial year and should be aligned with deadlines for your annual reports.
What Are the Benefits of SECR Compliance?
Participating in the SECR framework, whether mandatory or voluntary, provides several key business advantages:
Enhanced Risk Management: Analyzing energy and carbon emission patterns helps identify risks associated with energy waste and climate factors, leading to better strategic decisions.
Potential Cost Savings: Actively monitoring energy consumption often reveals opportunities to reduce usage, improve efficiency, and lower operational costs.
Improved Transparency and Accountability: Demonstrating environmental responsibility through clear reporting can enhance your company's reputation among investors, customers, and stakeholders.
Regulatory Compliance: For obligated businesses, the most direct benefit is achieving compliance and avoiding the financial and reputational risks of penalties.
What Are the Penalties for Non-Compliance With SECR?
Failure to comply with the SECR guidance can lead to significant financial penalties. The Conduct Committee of the Financial Reporting Council can levy fines for non-compliance. Additionally, since reports are submitted with your annual reports to Companies House, the agency can reject your application and make you submit it again if you fail to include SECR information. This can trigger late filing penalties from £150 up to £7,500, depending on the size of your company and how late you end up filing.
What Are the Common Challenges in SECR Reporting (And How to Overcome Them)?
Companies often face several challenges when preparing their first SECR report.
1. Data Collection: Gathering accurate and complete energy and emissions data can be time-consuming and resource-intensive without an automated system.
2. Inconsistencies: Using different measurement and reporting methods across departments or locations can lead to unreliable, inconsistent data.
3. Complex Supply Chains: Accurately calculating indirect emissions from sources you don't own or control (Scope 3 emissions) can be particularly difficult.
Overcoming these SECR challenges requires more than spreadsheets. It demands a powerful, carbon management solution with Scope 3 tracking capabilities. Enter Carbmee!
Automate SECR Compliance With Carbmee & Save Valuable Time
Carbmee’s carbon management platform is designed to simplify and automate your SECR reporting process. Here’s how you can benefit:
Automate Data Collection: Seamlessly gather energy and emissions data from across your operations, eliminating manual errors and saving valuable time.
Identify Decarbonization Opportunities: Use our powerful analytics to pinpoint areas for energy optimization, helping you reduce both emissions and costs.
Produce Audit-Ready Reports: Generate comprehensive, audit-ready reports that demonstrate your progress over time and satisfy all SECR disclosure requirements.
Book a free demo today to streamline your SECR reporting!
SECR: Frequently Asked Questions
Who Is Affected by SECR Regulations?
SECR regulations affect UK-based quoted companies of any size, as well as large unquoted companies and large Limited Liability Partnerships (LLPs) that meet specific size thresholds related to turnover, assets, or number of employees.
When Is the Deadline for an SECR Report?
The deadline for an SECR report is aligned with your company’s standard financial year-end filing deadline. The SECR information must be included within your annual report, such as the Directors' Report, which is submitted to Companies House.
Can a Company Be Exempt From SECR?
Yes. A company that otherwise qualifies for SECR reporting can be exempt if its total energy consumption over the reporting period is 40,000 kWh or less. However, to claim this exemption, you must first accurately calculate your total energy use. An SECR report example can help clarify which sources (such as electricity, gas, and transport fuels) need to be considered before referencing the exemption in your Annual Directors’ Report.
How Can Companies Simplify the SECR Process?
Using a carbon management software like carbmee EIS™ can streamline data collection, ensure methodological consistency, and automate report generation—saving time and reducing the risk of non-compliance.
Can Voluntary SECR Reporting Benefit My Business?
Yes. Even if not legally required, voluntarily adopting SECR can demonstrate environmental leadership, improve stakeholder trust, and uncover opportunities for energy efficiency and cost savings.
