The Government announced the demise of the CRC Energy Efficiency Scheme in 2016 to reduce the administration burden on participant organisations. As it is widely recognised that carbon emissions reporting has a valuable role to play in decarbonisation, the government introduced the Streamlined Energy and Carbon Reporting (SECR) as a new reporting framework from April 2019.
The SECR aligns with best practice, building on the existing mandatory reporting of greenhouse gas emissions by UK quoted companies The UK government and Devolved Administrations have committed to working together to deliver the best outcome as the new SECR reporting framework will apply across the UK both in line with and after the outcome of Brexit. The Statutory Instrument, approving the Companies (Directors’ Report) and Limited Liability Partnerships (Energy and Carbon Report) Regulations 2018, was approved on 6th November 2018.
Under the current Mandatory Carbon Reporting requirements, all quoted companies must include in Directors’ report:
- global scope 1 and scope 2 GHG emissions;
- methodology used to caluclate; and
- intensity metric
SECR will require large unquoted companies and large LLPs to include within Directors’ report (or LLP equivalent):
- The total underlying energy use and energy efficiency action taken must be included.
- UK energy use and associated scope 1 and scope 2 emissions – to include electricity, gas & transport as a minimum.
- Intensity metric chosen by company and methodologies used in calculation of disclosures
- Energy efficiency action taken in period of report
A company is defined as ‘large’, as per Companies Act, if it has at least two of the following:
- balance sheet of over £18 million
- turnover of over £36 million; and
- over 250 employees.
Where the Directors report covers a group of companies, the company or LLP must make the required statements based on its information and its subsidiaries. The Statutory Instrument has effect in respect of financial years beginning on or after 1st April 2019. The facility for electronic reporting will be provided and can be done on voluntary basis but is not mandatory. There is no requirement for third party verification of the data.
The Statutory Instrument provides exemptions where the organisation uses less than 40,000kWh in the reporting period across its operations in the UK or the Directors state in the report that such information is being withheld as to declare it would be seriously prejudicial to company or not practical to obtain. More clarity on these will be made available when the guidance is released in January 2019.
For further information and support on SECR, please email the compliance team at compliance@carbon2018.com or alternatively call Melanie Kendall-Reid on 01252 87 87 22.