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Streamlined Energy and Carbon Reporting (SECR): Reporting and Disclosure Guide

Streamlined Energy and Carbon Reporting (SECR) regulations require large companies to calculate their energy consumption and associated greenhouse gas emissions in their public annual reports.

This guide is intended for businesses preparing an SECR disclosure for the first time. It provides a step-by-step breakdown of what must be disclosed and the simplest way to calculate each figure, along with an example of the minimum disclosure required.

Here’s what we cover:

• What is Streamlined Energy and Carbon Reporting (SECR)?
• Who needs to comply with SECR?
• SECR reporting requirements
• How to calculate and report SECR data
• Example SECR disclosure

What is Streamlined Energy and Carbon Reporting (SECR)?

The Streamlined Energy and Carbon Reporting (SECR) framework was introduced by the UK Government in 2019 to simplify the rules and requirements for carbon reporting by large organisations.

SECR requires large UK businesses to disclose specific aspects of their energy use and emissions in their public annual reports.

The SECR regulations focus on reporting electricity, gas, and transport fuel consumption, together with the associated emissions, measured in kilograms of carbon dioxide equivalent (kg CO₂e).

Approximately 12,000 businesses submit an SECR disclosure each year, enhancing transparency around corporate energy consumption and carbon emissions.

Who needs to comply with SECR?

The SECR regulations must be followed by all large private organisations and all listed companies in the UK.

SECR qualification criteria

SECR applies to all quoted companies and to any unquoted companies or LLPs that meet at least two of the following criteria:

• Turnover of more than £36 million
• Balance sheet total exceeding £18 million
• Number of employees exceeding 250

These criteria apply to individual private limited companies, partnerships, and groups of companies.

Exemptions to SECR

There are three exemptions that allow businesses meeting the above criteria to be excluded from SECR disclosure requirements:

• Subsidiary exemption: Individual subsidiaries within a group are not required to report if their parent entity is reporting.
• Low energy usage: Businesses that have consumed less than 40,000 kWh of energy during the reporting year are exempt.
• Prejudicial disclosure: If the directors believe that reporting would seriously prejudice the interests of the business.

In each case, the use of an exemption must be stated in the Directors’ Report.

SECR reporting requirements

The SECR rules prescribe a set of minimum disclosures required in the Directors’ Report section of a company’s annual public accounts.

It is common practice to go beyond the minimum disclosures to highlight broader steps the company is taking to improve its green credentials.

The section below summarises the five key minimum requirements for large private companies.

💡 The disclosure requirements for public companies are more extensive. We recommend consulting your accounting firm for detailed guidance on public company reporting requirements.

1. Emissions from electricity and gas supplies

Emissions are measured in kilograms of carbon dioxide equivalent (kg CO₂e) and result from the company’s purchase of electricity and gas for its own use. This includes electricity and gas supplied to the business from the national grid, as well as deliveries of liquefied petroleum gas (LPG).

2. Emissions from transportation fuel

Emissions arise from the combustion of petrol or diesel for transport, measured in kilograms of carbon dioxide equivalent (kg CO₂e), where the organisation is responsible for purchasing the fuel. This includes the company’s owned or leased vehicle fleet but excludes employee travel by public transport.

3. Total energy consumption

The total amount of energy consumed, measured in kilowatt hours (kWh), from both electricity and gas purchases and transportation fuel. This figure is calculated using the input data from steps 1 and 2 above.

4. Emissions intensity ratio

An intensity ratio represents the company’s annual emissions from two sources, (1) purchased energy emissions and (2) transport emissions, in relation to a measurable factor linked to the company’s activities. For example, total carbon emissions (kg CO₂e) per employee.

5. Calculation method

A description of the methodology used to calculate the figures disclosed in steps 1 to 4 above.

How to calculate and report SECR data

This section provides practical guidance on collecting and calculating data for SECR to meet the minimum disclosure requirements for large private companies.

Collecting energy emissions data

The easiest way to calculate emissions from energy consumption is to use the total number of kWh of electricity and gas consumed in the year and apply a conversion rate to determine the emissions figure.

Here are the best sources of information for calculating your annual business energy consumption:

• Use a business energy monitoring software system that already records consumption at your business.
• Use the online portal of your commercial electricity and business gas suppliers to download energy usage reports.
• Add up the figures from all business electricity bills and business gas bills received during the year.
• Use figures from the energy management system operated by larger facilities teams.
• Use energy meter readings from business electricity meters and commercial gas meters at your properties.

Collecting fuel consumption data

The easiest way to calculate emissions from fuel consumption is to use the total number of litres of petrol or diesel purchased in the year and apply a conversion rate to determine the emissions figure.

Here are the three best sources of fuel consumption data:

• Invoices from your petrol and diesel providers.
• Annual summaries from fuel card providers.
• Reports from fleet management systems.

💡 Most companies do not include employee mileage claims in their mandatory SECR disclosure, as this is typically considered a Scope 3 indirect value chain emission.

Choosing an intensity ratio

SECR disclosure requirements allow companies to choose an energy intensity ratio most relevant to their activities. The Energy Savings Opportunity Scheme (ESOS) also requires the selection of an energy intensity ratio. We recommend using the same ratio to reduce the work required to comply with both schemes.

For more information, read our guidance on selecting energy intensity ratios for ESOS.

Conversion rates tables

The Department for Energy Security and Net Zero publishes annual conversion factors to enable businesses to calculate their emissions from energy consumption and fuel purchases easily.

Here’s a summary of the most commonly used conversion factors necessary for SECR disclosure:

These figures change each year, so we recommend using the latest figures on the Gov.uk Greenhouse gas emissions conversion factors page.

💡 Most companies use these conversion figures to report carbon emissions associated with green business energy tariffs. This is because, in the delivery of a green business electricity tariff, the power supplied by the grid comes from a mix of sources, including gas power stations, and therefore has a carbon footprint.

Example SECR disclosure

To help demonstrate these SECR disclosure rules, here is an example of a minimum disclosure for a large private company.

Environmental matters

The Company recognises the environmental impact of its energy usage and looks to reduce consumption where possible.

In the year, the electricity and gas purchases of the company in the UK contributed 42,000 kilograms of CO2e (2023: 31,000 kg) of emissions relating to the purchase of power and gas for its office.

In the year, the combustion of fuel for transportation in the UK produced 100,000 kilograms of CO₂e (2023: 85,000 kg), arising from the company’s vehicle fleet.

The total energy consumption from transportation and energy usage in the UK was 210,000 kWh (2023: 168,000 kWh).

The carbon intensity measure of kilograms of CO2e per full time equivalent employee was 7,700 (2023: 8,100).

We used the Department for Energy Security and Net Zero’s published greenhouse gas emissions conversion factors in our calculations.

SECR compliance timeline and deadlines

SECR reporting is an annual requirement for qualifying businesses.

The report must be included within the Directors’ Report of the annual accounts submitted to Companies House.

For most companies, the deadline for filing annual accounts is nine months after the financial year-end.

What happens if you don’t comply?

The annual accounts of most companies publishing an SECR disclosure will require an external audit. An external auditor will not normally verify the detailed accuracy of your SECR calculations but will check that a disclosure meeting the minimum requirements has been included.

An auditor should refuse to sign an annual report that is missing an SECR disclosure, which would prevent the company from filing its accounts with Companies House.

Late filing of annual reports results in escalating fines, depending on the length of the delay. Failure to file accounts is a criminal offence under the Companies Act, which can lead to director prosecutions and the striking off of the company.

Support for SECR compliance

Many companies use external support to assist with their Streamlined Energy and Carbon Reporting (SECR), as well as their ESOS compliance and wider environmental strategies.

Here’s a list of the best places to get support:

Professional services

Professional services firms are increasingly offering support to large organisations transitioning to net zero.

Their services encompass developing carbon strategies, setting targets, and establishing emission reporting processes for businesses.

These services typically go above and beyond the minimum SECR reporting requirements but enable businesses to use mandatory environmental disclosures to demonstrate their commitment to sustainable business practices.

Carbon accounting software

Several software solutions help automate SECR data collection and convert energy use into CO₂e emissions.

These cloud-based platforms can automatically generate SECR-compliant reports and audit documentation for businesses.

Business energy suppliers

Business energy suppliers can assist with SECR disclosure preparation since commercial gas and business electricity prices are based on energy consumption metrics.

The best business energy suppliers offer the following support:

• Annual energy consumption reports
• Carbon footprint reports or calculators
• Business energy efficiency tips and best practices

At Business Energy Deals, we specialise in helping businesses find better electricity and gas tariffs. Use our business energy comparison service today to see how much you can save.

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