Streamlined Energy and Carbon Reporting
Streamlined Energy and Carbon Reporting applies to 11,900 “large” companies and LLPs.
Energy & CO2e emissions data must be included annual reports submitted to Companies House.
Which Companies will need to comply with Streamlined Energy and Carbon Reporting?
All large companies and large Limited Liability Partnerships (LLPs) as defined under the Companies Act 2006 must comply with the requirements of Streamlined Energy and Carbon Reporting. Large companies and LLPs meet two of the three conditions below:
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- Annual turnover of £36 million or more
- Balance sheet total assets of £18 million or more
- 250 employees or more
The Logic
The UK Government wants to be seen as a world leader in reducing carbon emissions and protecting the environment. A major part of this, is the requirement for businesses to reduce their emissions in order that the UK can meet its net zero target by 2050. Measurement is key to a successful emissions reductions strategy.
The Streamlined Energy and Carbon Reporting requirements are the UK Government’s method of standardising reporting. Reporting the results in the public domain is essential to ensuring compliance with targets. Other organisations and stakeholders can use the information to inform the choices that they make. For example, when considering strategies related to climate change risk and emissions within their supply chain.
You should be taking action now
As the starting point for reporting was company financial years ending on or after 31st March 2020, your company should already have made its first report. Most companies have, but many have submitted incomplete or inaccurate returns. Data collection can be problematic; especially when determining emissions related to mileage claimed through the expenses system.
Reporting
Energy and emissions reports must conform to statutory presentation standards and must be included as part of the Directors’ report section of the accounts submitted to Companies House.
What must be reported
Businesses must publish the following information for each financial year:
• UK energy use
• The associated Scope 1 and Scope 2 emissions (direct and indirect emissions)
• An emissions intensity metric
• A narrative on energy efficiency action taken
• The methodology used in the calculation of disclosures
As a minimum, energy usage will include electricity, gas and transport and must be shown both in kWh and the associated GHG emissions (CO2e).
For most organisations transport is defined as fuels (including electricity) for road transport as well as business mileage driven in private cars. Companies are also encouraged to report their Scope 3 emissions, such as air and rail travel, but this is not mandatory.
The Energy categories are:
Electricity
• Purchased electricity
Gas
• Natural gas, LPG, other gases
Transport
• Diesel, petrol, LPG, CNG, electricity, aircraft and shipping fuels etc.
• Company cars, fleet vehicles, personal cars used for business and hire cars
• Onsite vehicles (e.g. fork-lifts, tractors)
The intensity metric should be relevant to the organisation’s industry. For example, tonnes of CO2e per m2 for the retail sector.
Collecting the Data
Obtaining energy usage from energy billing will be the easiest way of collecting the necessary data. However, not all energy usage and emissions can be collected in this way. Transport fuels will include a wide range of fuels including electricity for electric vehicles.
Business Mileage in Private Cars
Fuel reimbursed to employees as part of a business mileage claim must also be reported. This is the same as applies in ESOS (Energy Saving Opportunity Scheme) where it is called “grey fleet mileage”.
Landlord and Tenant
Where a landlord charges energy use to a tenant either by sub-metering, a percentage of total or even if the rent includes heat, light and power, then the tenant must report this consumption. It may therefore be necessary to estimate usage based on floor area using building benchmarks. This is because the legislation states “the party responsible for the consumption of energy should take the responsibility for reporting of it under this legislation”.
So, some organisations will face challenges.
Ways that we can help with Streamlined Energy and Carbon Emissions reporting
Our video the “Seven Deadly Sins of SECR” will show you some of the more common mistakes. Watch the video… If you think that you know about Streamlined Energy and Carbon Reporting, take our quiz…
If you need help in collecting, analysing and reporting SECR, have a look at GHGi Analytics…
For a longer description on SECR have a look at “SECR explained” on the Carbon Trust’s Website
If you’ve any queries or would like to discuss SECR or any related areas, then please contact us. info@ghginsight.com or call us on 01509 649 504.
