Understanding Streamlined Energy and Carbon Reporting

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SECR is a mandatory reporting framework designed to simplify and streamline how large companies in the UK report their energy consumption and carbon emissions. 

It is part of the government's broader strategy to encourage businesses to reduce their carbon footprint and contribute to the UK’s legally binding carbon neutrality target by 2050.

The requirements under SECR regulations are designed to ensure that businesses are taking steps to monitor their energy use and emissions, while also incentivising them to make improvements to their energy efficiency. SECR builds upon the previous Carbon Reduction Commitment (CRC) scheme, but with a more focused and simplified approach, making it easier for businesses to comply with and report their data.

As it stands, businesses meeting certain criteria are required to report their energy use and carbon emissions under SECR. 

These regulations affect companies in the UK that meet the following thresholds:

• Annual turnover of £36 million or more
• More than 250 employees
• A balance sheet total of £18 million or more

If your company meets any of these criteria, you will be required to report under SECR, which involves submitting a report as part of your annual financial filings. 

These reports should include:

• Energy Consumption: A breakdown of the total energy consumed by the business, including electricity, gas, and other fuels.
• Carbon Emissions: A report on the scope of carbon emissions associated with the business’s operations. These include:
  • Scope 1: Direct emissions from owned or controlled sources.
  • Scope 2: Indirect emissions from the generation of purchased energy.
  • Scope 3: Other indirect emissions (e.g., those from supply chains and business travel).
• Energy Efficiency Measures: Companies are required to describe the steps they have taken or plan to take to improve energy efficiency and reduce carbon emissions. This could include investing in energy-saving technologies or participating in sustainability initiatives.

Looking ahead, SECR regulations may evolve as the UK continues its push toward meeting its climate change targets. 

Here are some potential future developments in the SECR framework:

1. Expansion of Scope: The UK government may expand the scope of SECR reporting to include smaller companies or to require more detailed reporting of emissions in the supply chain (Scope 3 emissions).
2. More Stringent Reporting Requirements: As climate-related disclosures become increasingly important, the reporting criteria may become more detailed. Companies may need to provide more in-depth information on their carbon reduction strategies and energy efficiency projects.
3. Integration with Global Standards: As the UK’s climate strategy aligns with international efforts such as the Paris Agreement, SECR may also integrate more closely with global reporting standards, ensuring businesses are aligned with international best practices.
4. Carbon Pricing and Taxation: Future regulations may introduce carbon pricing or taxes as additional mechanisms for encouraging carbon reduction, meaning businesses will need to assess their carbon emissions more carefully and take action to reduce them.

For businesses subject to SECR, compliance means more than just filing a report. Companies are expected to:

1. Measure Energy Consumption: Companies should collect accurate data on energy usage across all operations, from electricity to gas and any other fuel sources.
2. Calculate Carbon Emissions: Using the data on energy use, businesses must calculate their carbon emissions, reporting them according to the three different scopes (Scope 1, 2, and 3).
3. Implement Energy Efficiency Measures: Companies should actively engage in improving energy efficiency, whether through upgrading to LED lighting, optimizing voltage, installing remote metering, or adopting other energy-saving technologies.
4. Submit a Report: The energy consumption and carbon emissions data must be submitted alongside annual financial reports, making transparency crucial.

As energy and carbon consultants, Imodus is well-placed to help companies navigate the complexities of SECR compliance. Here’s how we can assist:

1. Energy and Carbon Audits: We provide comprehensive energy audits to assess your current energy use, identify opportunities for savings, and calculate your carbon footprint.
2. Energy Efficiency Solutions: Imodus specializes in energy-saving technologies, such as LED lighting, voltage optimisation, and remote metering. Our team can help you implement these measures, improving your energy efficiency and reducing carbon emissions.
3. SECR Reporting Support: We offer expert support in gathering and analyzing the data required for SECR reporting. This ensures that your submissions are accurate, compliant, and clear.
4. Sustainability Strategy: Beyond compliance, we help businesses develop long-term sustainability strategies, providing actionable insights to reduce energy consumption and meet future environmental targets.

At iModus, our goal is to help you not only meet your SECR obligations but also create a more sustainable, energy-efficient future. 

By working with us, you can ensure that your company stays ahead of the regulatory curve while contributing to the UK’s climate goals.

If your business is required to comply with SECR or you want to learn more about improving energy efficiency, get in touch with iModus today.