The UK Government’s Streamlined Energy and Carbon Reporting (SECR) policy went live on 01 April 2019 and coincides with the end of the Carbon Reduction Commitment (CRC) Energy Efficiency Scheme. The SECR framework is intended to encourage the implementation of energy efficiency measures, to unlock economic and productivity benefits and achieve real reductions in the UK’s carbon emissions.
The scope of SECR will be wider than previous legislation, making it applicable to all quoted companies and large UK incorporated unquoted companies with at least 250 employees, or annual turnover greater than £36,000,000 and annual balance sheet total greater than £18,000,000.
While an opt-out option exists for organisations that use less than 40,000 kWh per annum, we expect the number of companies falling under the scheme to jump up to around 12,000, from approximately 1,200 which are currently required to report similar data under the Greenhouse Gas Emission reporting scheme.
Since our last update, we now know that full disclosure of Scope 1 and 2 emissions will be mandatory under the framework, with voluntary reporting of applicable Scope 3 emissions being considered ‘best practice’.
As the data will be reporting in eligible companies’ annual accounts, we suspect that there may be more interest from shareholders, investors, and other third parties around total greenhouse gas emissions and the reported opportunities to achieve tangible, year-on-year reductions. This potential for the ‘public’ to apply external pressure on companies to deliver real reductions in carbon emissions from the offset of SECR will be a big change over previous legislation.
Another consideration will be around the time and effort required to gather data on your Scope 3 emissions. Reporting them in addition to the mandatory Scope 1 and 2 emissions will be seen as best practice and could offset extra scrutiny or bad press further down the line if they are excluded, particularly where the Scope 3 emissions are considered to be significant. Such a move would mean a potentially higher emission intensity in the short term, but would also ensure full transparency and should help to focus attention on developing a suitable strategy for safeguarding the long-term sustainability of your organisation.
As the first carbon reports under SECR will need to be included in your annual accounts from 01 April 2020 onwards, now is the time to start considering how you’re going to ensure compliance with the framework.
Unlike the Energy Savings Opportunity Scheme (ESOS), there isn’t a requirement to have SECR signed-off by a specialist, meaning many organisations could in theory do it ‘in-house’. However, complying with energy and environmental legislation can be a daunting task for companies without specific energy or utility related expertise, which is why we’ve invested heavily in our capability to deliver SECR in full on your behalf.
Our SECR support service is now live and ready to go. With over 25 years of experience in delivering real-world energy efficiency improvements, we can get you through to compliance efficiently and cost-effectively.
Well ahead of the next deadline, now is a great time to find out how we can help to develop your carbon intensity metric baseline and reduce your environmental impact.