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Streamlined Energy and Carbon Reporting: are you prepared?

25 January 2021: For many companies, 2020 annual reports will include Streamlined Energy and Carbon Reporting requirements for the first time, while those preparing to report for the second year will be looking to build on the experience of first-time implementation. With that in mind, here’s a brief overview of the main things to consider when preparing SECR, good practice tips and how to find out more

In 2018, new requirements were introduced for large companies and LLPs to report on their emissions and energy use. Streamlined Energy and Carbon Reporting (SECR) applies to reporting periods ending 31 March 2020 or later. 

These regulations have been introduced as part of the government’s commitment to Net Zero 2050, ensuring large businesses are transparent about their energy use and urging them to deliver and report on efficiencies.

Who needs to implement SECR? 

  • Quoted companies
  • Large unquoted companies
  • Large LLPs

There are several exemptions, including subsidiaries and organisations who used 40,000kWh of energy or less during the reporting period. You can find the full list of exemptions and the definition of a ‘large company’ here. Please note this guide is only available to members of the Financial Reporting Faculty. 

What needs to be reported? 

Large unquoted companies and large LLPs

  • UK emissions only
  • Gas and fuel used (fuel only for transport)
  • Electricity for own use (including transport)

Quoted companies

  • Global emissions (with UK proportion)
  • Tonnes of CO2 emitted, kWh of energy used
  • Combustion of any fuel and industrial emissions
  • Electricity, steam, heating or cooling (own use)

All organisations required to include SECR must also share:

  • the period covered (ideally this would be the same as the reporting period);
  • the methodology used for calculations;
  • at least one intensity measure (such as emissions per £m revenue or per full-time employee); and,
  • the main efficiency measures the business has undertaken.

Although quoted companies have been required to report on energy use since 2013, there have been changes to the information required and commentary must also now be given on how the business is improving its energy efficiency. 

Good practice tips

In 2020, ICAEW’s Financial Reporting Faculty hosted a webinar on the subject. Presenters Andrew Jones and Catriona Lawrie from Mazars shared their insights on things to bear in mind when preparing your SECR:

  • When changes occur explain why this has happened, for better or worse.
  • Identify and explain any exceptional figures – you may also want to provide underlying figures.
  • Aim for consistency year on year and try to show trends where possible.
  • Use multiple intensity measures if appropriate.
  • Tie data collection into business management systems, so collection is as automated as possible, reliable and easier to explain. 

Members of the Financial Reporting Faculty can view the webinar and access further resources on Streamlined Energy and Carbon Reporting here. Also you can check out our Financial Reporting resources.  

Accounting and finance professionals in the energy sector can join the ICAEW Energy & Natural Resources Community for free and get the latest sector-specific news and developments in the sector. 

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