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An Overview of SECR Regulations and Legislation

It’s estimated that almost 12,000 companies will be required to submit reports under the Streamlined Energy and Carbon Reporting Regulations (SECR Regulations). That is ten times the 1,200 companies that were required to comply with the Carbon Reduction Commitment (CRC), which SECR largely replaces.

If you’re reading this, it’s probably because you’re looking for more information on SECR legislation, so here’s a brief overview to get you started. If you have any specific questions about your business, please get in touch, as this is our area of expertise.

What is the SECR framework and when does the legislation come into play?

The new SECR regulations came into force on 1 April 2019.

The SECR framework is part of the government’s drive to improve the environment and monitor emissions by strengthening the reporting requirements of companies. By ensuring businesses stay within the acceptable limits, the authorities can both help reduce emissions and also get a more accurate picture of what UK plc’s environmental impact looks like.  

Importantly, SECR works alongside(i.e. does not replace) existing frameworks such as the Energy Saving Opportunity Scheme (ESOS), Mandatory Greenhouse Gas (GHG) reporting, the Climate Change Agreements Scheme (CCA) and the EU Emissions Trading Scheme (ETS).

The new SECR regulations came into force on 1 April 2019.

Who does it apply to?

Although small companies are not obliged to submit SECRs, they are encouraged to do so voluntarily, and there could be efficiency benefits for a company to take a thorough look at their energy consumption. If they are growing, and could end up large enough to have to comply, it would be a good idea to start preparing by voluntarily reporting.

it would be a good idea to start preparing by voluntarily reporting.

The point at which a company is large enough to be obliged to file a report is very specific, and there are three criteria:

  • If a quoted company already reports under GHG reporting regulations, it must submit an SECR.
  • All large companies must report, where “large” means that a company satisfies two of the following three criteria: (1) a turnover of at least £36m; (2) a balance sheet of at least £18m; and (3) at least 250 employees.
  • Large Limited Liability Partnerships must file an Energy and Carbon Report annually.

There are exemptions, such as some charities, not-for-profits and NHS Trusts, but if you’re not sure, please speak to one of our experts straight away.

Some specific examples of key regulations

The three eligible groups listed above have slightly varying reporting responsibilities. However, as an indication of the complexity of the new regulations, below are some of the factors that typical qualifying companies need to take into account when preparing an SECR report:

  • energy usage across the entire business, including premises’ gas and electricity consumption;
  • fuel usage by transport;
  • Global Greenhouse Gases Protocol Scope 1 and Scope 2 emissions; and
  • a minimum of one intensity ratio.

Also: 

  • companies need to show the methodology used to reach reported figures; and
  • companies must demonstrate measures they are taking to improve efficiency.

Why Encope are the people to speak to

As the name suggests, the streamlined energy and carbon reporting framework is supposed to simplify reporting, but that’s not to say that expertise isn’t required to file a report. This is not a job for a regular auditor or accountant; it requires the full involvement of energy specialists with a scientific approach to assessing energy consumption and emissions. 

Very large companies might have individuals or even departments dedicated to the task, but around the thresholds of qualification, that simply wouldn’t be cost-effective. That’s why using Encope to calculate your SECR filings makes sense. We have years of experience dealing with CRC reports and other similar reporting, and can guarantee that we’ll not only be able to report accurately and efficiently, but we’ll also be able to demonstrate the methodologies we’ve used, as we’ve used them countless times before.

If you’re still unsure whether you qualify for SECR reporting, or want to start preparing for your company’s submission, please get in touch today so we can ensure you’re fully compliant by the time you file your annual report.

Enjoy fixed cost SECR reporting, from Encope for just £1,500.

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