Key takeaways

• SECR is a mandatory UK reporting requirement that applies to large businesses, requiring disclosure of energy consumption, associated carbon emissions and energy efficiency actions.
• The framework is designed to improve transparency around energy use and carbon emissions, encouraging businesses to take action on energy efficiency and emissions reduction.
• SECR compliance is increasingly important for businesses seeking to enhance credibility with investors, customers and supply chain partners.

What is SECR?

SECR stands for Streamlined Energy & Carbon Reporting, a framework that requires UK businesses to disclose information about their energy consumption, carbon emissions and energy efficiency actions in their annual reports. Introduced in 2019, SECR is part of a broader effort to encourage transparency and accountability in relation to carbon emissions, helping the UK move toward its climate goals.

Under SECR, qualifying organisations must report their energy use and emissions data, which are then made publicly available as part of their financial statements. This requirement is part of a wider push to get businesses to better understand their environmental impact and implement effective carbon reduction strategies.

Who must comply with SECR?

SECR applies to businesses that meet the following criteria:

• UK incorporated companies with more than 250 employees
• Annual turnover exceeding £36 million
• A balance sheet total exceeding £18 million

These thresholds apply to UK registered companies and limited liability partnerships (LLPs). Notably, some businesses that fall outside these criteria may still voluntarily report under SECR, and public bodies, charities and non‑profit organisations are generally exempt unless specifically required to comply.

While small and medium-sized enterprises (SMEs) may be exempt, they could still face indirect pressure to comply due to supply chain or customer expectations. Larger organisations increasingly request carbon data from suppliers, making it valuable for SMEs to prepare for these requirements early.

What businesses must report under SECR

Once an organisation is determined to be subject to SECR, it must disclose the following:

• UK energy use
  Total energy consumption across all operations, including electricity, gas and any fuels used in company vehicles or processes.
• Associated carbon emissions
  Carbon emissions resulting from energy consumption are reported as Scope 1 and Scope 2 emissions:

Scope 1: Direct emissions from fuel combustion (e.g., gas, diesel)
Scope 2: Indirect emissions from purchased electricity

• Energy efficiency action taken
  A brief narrative explaining the energy-saving measures that the business has taken or plans to implement. This could include upgrading equipment, improving insulation or introducing more efficient energy management systems.
• Carbon intensity metric
  The emissions reported are usually normalised by a key business metric, such as turnover or number of employees. This gives a better sense of efficiency, especially when comparing companies of different sizes.

The aim of these requirements is to not only inform but also to drive energy efficiency, highlighting where energy consumption is high and pointing out areas for improvement.

Why SECR matters to businesses

At first glance, SECR may appear as just another compliance obligation. However, there are significant commercial and operational benefits to embracing it fully:

1. Improved energy management

Reporting under SECR forces businesses to track and understand their energy use, which often uncovers opportunities for efficiency improvements. Identifying areas of high energy consumption can lead to operational changes that reduce costs and improve profitability.

2. Enhanced credibility

As public awareness of environmental issues grows, businesses that are transparent about their energy use and emissions will have a competitive advantage. SECR provides credibility to businesses striving to meet sustainability goals and showcases their commitment to carbon reduction.

3. Supply chain expectations

Larger organisations, especially in the public sector, increasingly request energy and emissions data from their suppliers. SECR helps businesses prepare for these requirements and aligns them with growing demand for environmental transparency across the supply chain.

4. Investors and customers are paying attention

Investors and customers are increasingly looking for businesses that are committed to reducing their carbon footprint. By complying with SECR, businesses can demonstrate they are aligned with broader environmental and sustainability goals, making them more attractive to investors and customers alike.

How Green Economy can help

Green Economy offers expert support to businesses navigating SECR compliance. We help businesses:

• Understand reporting requirements: We guide you through the SECR process, ensuring all relevant energy use and emissions data are accurately captured.
• Identify energy efficiency opportunities: Through tailored audits and assessments, we highlight areas for improvement, from upgrading equipment to improving building insulation.
• Prepare SECR reports: Our team can assist with preparing clear, compliant SECR reports that meet all legal requirements.
• Support carbon reduction planning: Green Economy helps businesses create actionable plans to reduce energy consumption and carbon emissions, aligned with SECR requirements and broader sustainability goals.

With our experience in energy management and sustainability, we can help businesses not just meet their SECR obligations but also create tangible, lasting improvements in energy efficiency.