The Streamlined Energy and Carbon Reporting scheme will come into effect from 1st April. Here’s everything your business needs to know
The Streamlined Energy and Carbon Reporting (SECR) scheme is a government initiative set to replace the soon to be scrapped Carbon Reduction Commitment Energy Efficiency Scheme (CRC) for businesses on 1st April 2019.
This implementation will follow the recent news from Phillip Hammond’s Spring Statement announcing a call for evidence to potentially save SMEs up to £2.5 billion a year in energy costs.
What is SECR?
Simply put, SECR is an extension of current Mandatory Greenhouse Gas (MGHG) reporting. It is an annual reporting requirement for organisations, in which they must disclose their energy consumption and carbon emissions relating to their use of electricity, gas and transport. SECR promises to be simpler than the current CRC scheme, although much of the criteria is similar. Proposed key features of SECR include:
- Eligible unquoted companies will be required to report their UK energy use and associated emissions, alongside an intensity metric. Energy use for unquoted companies covers electricity, gas and transport as a minimum.
- UK quoted companies will continue to be required to disclose Scope 1 and Scope 2 emissions, with Scope 3 optional, as well as an intensity metric.
- Quoted companies will also have to report on global energy use.
- Following the first year of qualification, companies will also have to publish the previous year’s emissions and energy use alongside their latest figures.
- A narrative commentary on action taken over the last year to improve energy efficiency will also be required. It is not necessary to disclose ESOS recommendations, and as some information can be sensitive, there is an exemption from disclosing information which would be prejudicial to the interests of the company.
- Businesses covered in a parent company’s report will not be required to report themselves.
Who will be affected by SECR?
SECR is outlined as being a scheme that has significant impact on “large businesses”. What this means is that organisations that are a classed as a UK Quoted Company (MGHG) will need to report, as well as UK listed companies featuring at least two of the following:
- 250 or more employees
- A turnover of £36 million or more
- A balance sheet total of at least £18 million
SECR also affects most companies currently covered by ESOS legislation. This means that, although most ESOS participants do not currently participate in CRC, SECR will impose annual energy and carbon reporting on a large number of businesses who until now have only been involved in the 4-yearly ESOS cycle.
As such, SECR is set to impact far more companies than previous mandatory reporting schemes. Upwards of 11,900 UK companies will need to comply, compared to just 4,000 under CRC and 1,200 under the current Greenhouse Gas Emissions reporting scheme.
Timeline of events
On 31st March 2019, the current CRC scheme will end. Following this, SECR is due to commence from 1st April 2019 and will apply to all Large Undertakings.
Despite the termination of the CRC scheme, CRC reporting for the 2018/19 year will still be due by 31st July 2019. Then, on 1st April 2020, the first SECR reporting will be due. Your business’s will be required following your first full financial year under SECR, so 1st April 2020 will be the earliest date that you’ll need to submit your report.
If you want to find out more about your energy reporting requirements as a business, or you’d like to find out more about saving on your energy costs, contact The Energy Check today. Simply click here or call us on 0191 691 18 02.