The UK government has pledged to reach net zero greenhouse gas emissions by 2050. This commitment is part of the government’s plan to tackle climate change and leave a better world for our children.

In April 2019, the UK Government introduced Streamlined Energy & Carbon reporting (SECR) for businesses. The legislation requires businesses to be transparent about how and where they are using energy in an effort to make them more accountable for their emissions. Companies currently play a huge role in contributions to green house gas emissions and, in order to meet the target of net-zero by 2050, this must change.  The introduction of SECR regulations was a very welcome step in the journey towards helping corporates to be more aware and accountable for their energy usage.

The regulations present an opportunity for larger global businesses who were not previously reporting to consider applying best energy efficiency practice.

Who must comply with Streamlined Energy and carbon reporting?

Over 11,900 UK organisations need to comply with SECR regulations, many of which are large unquoted companies that did not previously need to report on energy and carbon.

Large UK incorporated companies must report if they have two of the three qualifying conditions;

  • at least 250 employees,
  • an annual turnover greater than £36m
  • an annual balance sheet total over £18m.

Private sector organisations which fall outside of the scope of the new regulations are encouraged to voluntarily report.

What must be reported?

Businesses must report their energy emissions, including from electricity, gas and transport and an intensity metric in their annual report for financial years.  They must also provide a narrative commentary on energy efficiency action taken in the financial year and, where appropriate, a report on global energy use.

Brought forward from the previous industry legislation (the Carbon Reduction Commitment scheme) Companies must continue to report on direct greenhouse gas emissions from owned or controlled sources and indirect emissions generated by purchased energy.

What are greenhouse gases?

The Climate Change Act of 2008 requires the UK Government to set out five-yearly carbon targets which they aim to meet, running until 2032. The Climate Change Act 2008 also named six major greenhouse gases responsible for climate change. These are carbon dioxide, methane, nitrous oxide, hydrofluorocarbons, perfluorocarbons and sulphur hexafluoride. A large portion of the UK’s greenhouse gases are made up of carbon dioxide, which is primarily released by burning fossil fuels. This could be anything from coal power stations to the petrol you put into your car. The other five greenhouse gases are primarily linked to agriculture and waste management solutions.